One-reason decision-making: Modeling violations of expected utility theory

People violate expected utility theory and this has been traditionally modeled by augmenting its weight-and-add framework by nonlinear transformations of values and probabilities. Yet individuals often use one-reason decision-making when making court decisions or choosing cellular phones, and institutions do the same when creating rules for traffic safety or fair play in sports. We analyze a model of one-reason decision-making, the priority heuristic, and show that it simultaneously implies common consequence effects, common ratio effects, reflection effects, and the fourfold pattern of risk attitude. The preferences represented by the priority heuristic satisfy some standard axioms. This work may provide the basis for a new look at bounded rationality.

A Simple Tool for Qualitatively Testing,Quantitatively Measuring,and Normatively Justifying Savage's Subjective Expected Utility

This paper introduces a new preference condition that can be used to justify (or criticize) expected utility. The approach taken in this paper is an alternative to Savage's, and is accessible to readers without a mathematical background. It is based on a method for deriving comparisons of tradeoffs from ordinal preferences. Our condition simplifies previously-published tradeoff conditions, and at the same time provides more general and more powerful tools to specialists. The condition is more closely related to empirical methods for measuring utility than its predecessors. It provides a unifying tool for qualitatively testing, quantitatively measuring, and normatively justifying expected utility.     

Recursive expected utility and the separation of attitudes towards risk and ambiguity: an experimental study

We use the multiple price list method and a recursive expected utility theory of smooth ambiguity to separate out attitude towards risk from that towards ambiguity. Based on this separation, we investigate if there are differences in agent behaviour under uncertainty over gain amounts vis-a-vis uncertainty over loss amounts. On an aggregate level, we find that (i) subjects are risk averse over gains and risk seeking over losses, displaying a “reflection effect” and (ii) they are ambiguity neutral over gains and are mildly ambiguity seeking over losses. Further analysis shows that on an individual level, and with respect to both risky and ambiguous prospects, there is limited incidence of a reflection effect where subjects are risk/ambiguity averse (seeking) in gains and seeking (averse) in losses, though this incidence is higher for ambiguous prospects. A very high proportion of such cases of reflection exhibit risk (ambiguity) aversion in gains and risk (ambiguity) seeking in losses, with the reverse effect being significantly present in the case of risk but almost absent in case of ambiguity. Our results suggest that reflection across gains and losses is not a stable individual characteristic, but depends upon whether the form of uncertainty is precise or ambiguous, since we rarely find an individual who exhibits reflection in both risky and ambiguous prospects. We also find that correlations between attitudes towards risk and ambiguity were domain dependent.      

Expectations, Disappointment, and Rank-Dependent Probability Weighting

We develop a model of Disappointment in which disappointment and elation arise from comparing the outcome received, not with an expected value as in previous models, but rather with the other individual outcomes of the lottery. This approach may better reflect the way individuals are liable to experience disappointment. The model obtained accounts for classic behavioral deviations from the normative theory, offers a richer structure than previous disappointment models, and leads to a Rank-Dependent Utility formulation in a transparent way. Thus, our disappointment model may provide a clear psychological rationale for the subjective transformation of probabilities.     

Reconciliation with the Utility of Chance by Elaborated Outcomes Destroys the Axiomatic Basis of Expected Utility Theory

Expected utility theory does not directly deal with the utility of chance. It has been suggested in the literature (Samuelson, 1952, Markowitz, 1959) that this can be remedied by an approach which explicitly models the emotional consequences which give rise to the utility of chance. We refer to this as the elaborated outcomes approach. It is argued that the elaborated outcomes approach destroys the possibility of deriving a representation theorem based on the usual axioms of expected utility theory. This is shown with the help of an example due to Markowitz. It turns out that the space of conceivable lotteries over elaborated outcomes is too narrow to permit the application of the axioms. Moreover it is shown that a representation theorem does not hold for the example.     

Rational behaviour: A comparison between the theory stemming from de Finetti's work and some other leading theories

We present some interesting features of de Finetti's decision theory; then we extended the theory. The extended theory has a normative character and is of the expected utility kind, but it is also very adaptable. By comparing it with some leading theories, we find that our theory is compatible with consideration of the whole probability distribution — it can even accommodate Allais' paradox -, while it is not generally compatible with probability weighting. We are mainly interested in the normative point of view.     

Choice under risk and the security factor: An axiomatic model

The particular attention paid by decision makers to the security level ensured by each decision under risk, which is responsible for the certainty effect, can be taken into account by weakening the independence and continuity axioms of expected utility theory. In the resulting model, preferences depend on: (i) the security level, (ii) the expected utility, offered by each decision. Choices are partially determined by security level comparison and completed by the maximization of a function, which express the existing tradeoffs between expected utility and security level, and is, at a given security level, an affine function of the expected utility. In the model, risk neutrality at a given security level implies risk aversion.     

Error Propagation in the Elicitation of Utility and Probability Weighting Functions

Elicitation methods in decision-making under risk allow us to infer the utilities of outcomes as well as the probability weights from the observed preferences of an individual. An optimally efficient elicitation method is proposed, which takes the inevitable distortion of preferences by random errors into account and minimizes the effect of such errors on the inferred utility and probability weighting functions. Under mild assumptions, the optimally efficient method for eliciting utilities and probability weights is the following three-stage procedure. First, a probability is elicited whose subjective weight is one half. Second, the utility function is elicited through the midpoint chaining certainty equivalent method using the probability elicited at the first stage. Finally, the probability weighting function is elicited through the probability equivalent method.     

从“圣瓦伦丁节”在中国的盛行透析“七夕节”的生存困境与出路

作为中华民族历史文化长河所积淀的产物,七夕传统节日承载着丰富而深厚的文化内涵。以乞巧为主要内容的节日习俗已不能满足当今社会转型时期人们的精神需求,七夕节面临着生存困境。西方圣瓦伦丁节在中国的盛行,对中国传统节日七夕节礼俗文化造成极大的冲击。挽救七夕节,不能盲目效仿西方情人节。只有官民合力,采取有效措施,才能共同实现七夕传统节日在现代社会的创造再生。     

现代文学的审美超越性与现实功利的羁绊

文学的超越性是以它的现实性为基础的,中国现代文学所面临的问题不在于它是否反映了现实,而在于对现实的功利性态度局限了它对现实的深入表现.一方面,现实功利性文化的制约把现代文学的关注点牢牢地吸附在社会政治实践上,使文学难以在探索范围和深度上有大的突破;另一方面,中国传统的以"正德"实践为目标的超越模式既使作家强调事功而忽视对"真"的探索,也使作家的主体意识受到抑制.这正是现代文学的超越性困境之所在.     

Uncertainty with Partial Information on the Possibility of the Events

The Choquet expected utility model deals with nonadditive probabilities (or capacities). Their dependence on the information the decision-maker has about the possibility of the events is taken into account. Two kinds of information are examined: interval information (for instance, the percentage of white balls in an urn is between 60% and 100%) and comparative information (for instance, the information that there are more white balls than black ones). Some implications are shown with regard to the core of the capacity and to two additive measures which can be derived from capacities: the Shapley value and the nucleolus. Interval information bounds prove to be satisfied by all probabilities in the core, but they are not necessarily satisfied by the nucleolus (when the core is empty) and the Shapley value. We must introduce the constrained nucleolus in order for these bounds to be satisfied, while the Shapley value does not seem to be adjustable. On the contrary, comparative information inequalities prove to be not necessarily satisfied by all probabilities in the core and we must introduce the constrained core in order for these inequalities be satisfied. However, both the nucleolus and the Shapley value satisfy the comparative information inequalities, and the Shapley value does it more strictly than the nucleolus. This revised version was published online in June 2006 with corrections to the Cover Date.     

To be,or not to be,that is the question: An empirical study of the WTP for an increased life expectancy at an advanced age

This study reports an attempt to measure the value of an increased survival probability at advanced ages. It turns out that the average willingness to pay for a program which would increase the expected length of life by one year, conditional on having survived to the age of 75 years, is lower than $1,500. The willingness to pay increases with a person's age, but at a low and seemingly constant rate (1–4 percent per year).     

“中国梦”的思想意蕴、实践路径和时代价值发微

民族伟大复兴中国梦具有深厚思想意蕴、清晰实践路径和重要时代价值。可以从基本内涵、本质属性、价值取向和历史方位四个维度理解其思想意蕴,从路径选择、行动指南、制度支撑、实践主体、精神动力、力量源泉、领导保障、任务布局和作风要求九个方面把握其实践路径,从理论创新意义、实践引领意义和世界历史意义三个层次认识其时代价值。深入学习领会中国梦就要理解其丰富厚重的思想意蕴、牢牢把握其系统清晰的实践路径,大力彰显其重大深远的时代价值。     

仙界方七日 人间已千年——古代游仙文学的相对时空观

在中国古代的游仙文学里存在一个古老的信仰,当人进入一个特殊的空间(如仙境)或神圣容器(洞窟、葫芦等)时,和人间相比,时间的流速会变慢,正所谓"仙界方七日,人间已千年".于是许多游仙文学以之为吟咏对象,形成"沧海桑田"和"地久天长"两个意象.追溯这一时空观的来源,与道教徒的修炼生活有关.     

时间的起源与谱系--试论海德格尔对胡塞尔的内在时间意识学说的批评和改造

对于胡塞尔的内在时间意识的学说 ,海德格尔既有肯定 ,也有批评。其批评主要集中在以下三个方面 :首先 ,在海德格尔看来 ,不能像胡塞尔那样从意识现象中寻找时间的起源 ,因为时间是知觉、记忆、期望等意识行为的基础 ,而不是相反 ;其次 ,海德格尔认为胡塞尔虽然看到了时间的绽出性 ,但从总体上而言 ,他的时间概念仍然停留在传统时间观的视野之内 ;最后 ,海德格尔认为 ,在时间的本性的问题上 ,无论是牛顿式的客观主义立场还是胡塞尔等人的主观主义立场都是片面的、肤浅的。     

A model of the inflationary process in six major O.E.C.D. economies: Empirical results and policy implications

In contrast to most recent empirical work on inflation which has concentrated on the size and stability of coefficients in the wage equation, this paper provides a reexamination of the price equation. Evidence is presented on the structural determinants of inflation in six large industrial nations. It is demonstrated that price equations which include capital costs and excess demand among the regressors perform exceedingly well according to the usual statistical criteria. The results of this study indicate that the inflationary process possesses a high degree of uniformity among the larger industrial countries. This pertains not only with respect to the specific independent variables in price equations, but also with respect to the high degree of uniformity of the estimated coefficients. Additionally, the findings indicate that lower productivity growth and higher capital costs have contributed significantly to the inflationary process since 1974. Furthermore, since higher capital costs are one consequence of tighter monetary policies, the adoption of such policies in response to the two oil price shocks of the 1970s may have offset their intended deflationary effects on prices through the linkage of wage costs and aggregate demand.     

Theory of Mind, Self-worth and the Mother–Child Relationship

We tested the hypothesis that mother–child warmth and responsiveness would moderate the link between young children's theory of mind skills and self‐worth. Participants included 125 same‐sex pairs of 3.5 year‐old twins and their mothers. A battery of tests was individually administered to measure the children's theory of mind skills and verbal intelligence, and their self‐reported self‐worth was assessed using a puppet interview. Following visits to the families' homes, the observers completed ratings of warm responsive mother–child behavior based on videotaped unstructured and structured observations. As expected, warm responsive behavior moderated the relation between their theory of mind and the child's self‐worth. Their theory of mind was positively associated with self‐worth in warm responsive mother–child dyads, and there was weaker evidence that their theory of mind may be negatively associated with self‐worth in less warm, unresponsive mother–child dyads.     

Dollar appreciation,deficit stimulation,and the new protectionism

This article probes whether contemporary U.S. protectionism arises from an appreciating dollar. It concludes that (a) an enrich-thy-neighbor policy of upvaluation has transformed the current U.S. economic recovery into an engine of global recovery; (b) flexible exchange rates continually equilibrate the balance of payments as evidenced in changed domestic—relative to foreign—prices, as well as in capital movements induced by interest-rate differentials resulting from exchange-rate shifts; and (c) flexible exchange rates automatically alter so as to maintain a country's competitive position in the world economy even when facing deficits at home and abroad.     

Examining links between affective empathy,cognitive empathy,and peer relationships at the transition to school

The current study aimed to (i) examine associations across features of affective and cognitive empathy, and (ii) explore their independent role for children's peer relationships at the transition to school. Affective empathy was measured using both observations of children's facial affect during an empathy-eliciting event and dispositional affective empathy to peer distress via teacher report. Cognitive empathy was measured using an index of children's proclivity to engage in perspective taking when witnessing the distress of another. Children's theory of mind was also assessed given close links with cognitive empathy. Participants were 114 Australian children (M_age = 67 months, SD = 5 months) assessed across two sessions during their first year of formal schooling. Findings showed that features of children's affective and cognitive empathy were unrelated, but both showed independent associations with children's positive peer relationships (assessed via peer-reported social preference and teacher-rated peer social maturity). The current study provides support for the delineation between features of affective and cognitive empathy in early school-age children, and the importance of understanding both affective and cognitive empathy for children's peer relationships at the transition to school. These findings have implications how we understand both the nature of empathy in childhood and the role it plays in supporting children's positive peer relationships.     

邓小平的苏共二十大观和中国改革的政治根基

20世纪50年代中期,在毛泽东的领导下,邓小平积极参与了中国共产党对苏共二十大和斯大林问题的重新评价,并且形成了自己的独特认识。这一认识为他在苏共二十大20多年后正确评价毛泽东的历史地位提供了重要的历史经验。从中国特色社会主义的历史进程来看,邓小平对毛泽东历史地位的科学认识和评价,为中国改革奠定了坚实的政治根基。由此,中国走上了社会主义发展的新道路,这成为邓小平对新时期中国社会主义建设做出具有划时代意义的两大贡献之一。