Thinking and Reasoning 2 (1):33 – 49 (1996)
|Abstract||We postulate the Testing Principle : that individuals ''act like statisticians'' when they face uncertainty in a decision problem, ranking alternatives to the extent that available evidence allows. The Testing Principle implies that completeness of preferences, rather than the sure-thing principle , is violated in the Ellsberg Paradox. In the experiment, subjects chose between risky and uncertain acts in modified Ellsberg-type urn problems, with sample information about the uncertain urn. Our results show, consistent with the Testing Principle, that the uncertain urn is chosen more often when the sample size is larger, holding constant a measure of ambiguity (proportion of balls of unknown colour in the urn). The Testing Principle rationalises the Ellsberg Paradox. Behaviour consistent with the principle leads to a reduction in Ellsberg-type violations as the statistical quality of sample information is improved, holding ambiguity constant. The Testing Principle also provides a normative rationale for the Ellsberg paradox that is consistent with procedural rationality.|
|Keywords||No keywords specified (fix it)|
|Through your library||Configure|
Similar books and articles
Edward E. Schlee (1997). The Sure Thing Principle and the Value of Information. Theory and Decision 42 (1):21-36.
Ronald N. Giere (1970). An Orthodox Statistical Resolution of the Paradox of Confirmation. Philosophy of Science 37 (3):354-362.
Patrick Maher (1999). Inductive Logic and the Ravens Paradox. Philosophy of Science 66 (1):50-70.
Horacio Arlo-Costa & Jeffrey Helzner, Iterated Random Selection as Intermediate Between Risk and Uncertainty.
Jeffrey Helzner (2009). On the Application of Multiattribute Utility Theory to Models of Choice. Theory and Decision 66 (4):301-315.
Katie Steele (2007). Distinguishing Indeterminate Belief From “Risk-Averse” Preferences. Synthese 158 (2):189 - 205.
Horacio Arló-Costa & Jeffrey Helzner (2010). Ambiguity Aversion: The Explanatory Power of Indeterminate Probabilities. Synthese 172 (1).
Jürgen Eichberger & David Kelsey (1999). E-Capacities and the Ellsberg Paradox. Theory and Decision 46 (2):107-138.
Prasanta S. Bandyopadhayay (1994). In Search of a Pointless Decision Principle. PSA: Proceedings of the Biennial Meeting of the Philosophy of Science Association 1994:260 - 269.
Added to index2009-02-11
Total downloads29 ( #42,416 of 549,122 )
Recent downloads (6 months)0
How can I increase my downloads?