Expected Utility Hypotheses and the Allais Paradox

Expected Utility Hypotheses and the Allais Paradox

The whole basis of the theory of decisions involving risk has been shaken and put into question. Consequently, basic research in the fundamentals of utility and value theory evolved into a crisis.

Author: M. Allais

Publisher: Springer

ISBN: STANFORD:36105035617641

Category: Social Science

Page: 714

View: 101

Utility theory or, value theory in general, is certainly the cornerstone of decision theory, game theory, microecon~mics, and all social and political theories which deal with public decisions. Recently the American School of utility, founded by von N eumann Morgenstern, encountered a far-going criticism by the French School of utility represented by its founder Allais. The whole basis of the theory of decisions involving risk has been shaken and put into question. Consequently, basic research in the fundamentals of utility and value theory evolved into a crisis. Like any crisis in basic research, and this one was not an exception, it was very fruitful. One may simply say: Allais versus von Neumann-Morgenstern, or the French School of utility versus the American School, became one of the battlefields of scientific development which proved to be a most creative source of new advances and new developments in all those sciences which are based on evaluation of utilities.
Categories: Social Science

Expected Utility Hypotheses and the Allais Paradox

Expected Utility Hypotheses and the Allais Paradox

KENNETH R. MAC CRIMMON AND STIG LARS SON UTILITY THEORY: AXIOMS VERSUS 'PARADOXES.” ABSTRACT. Few attempts have yet been made to interrelate the major axiom systems of expected utility theory such as those presented by von ...

Author: M. Allais

Publisher: Springer Science & Business Media

ISBN: 9789401576291

Category: Social Science

Page: 715

View: 799

Utility theory or, value theory in general, is certainly the cornerstone of decision theory, game theory, microecon~mics, and all social and political theories which deal with public decisions. Recently the American School of utility, founded by von N eumann Morgenstern, encountered a far-going criticism by the French School of utility represented by its founder Allais. The whole basis of the theory of decisions involving risk has been shaken and put into question. Consequently, basic research in the fundamentals of utility and value theory evolved into a crisis. Like any crisis in basic research, and this one was not an exception, it was very fruitful. One may simply say: Allais versus von Neumann-Morgenstern, or the French School of utility versus the American School, became one of the battlefields of scientific development which proved to be a most creative source of new advances and new developments in all those sciences which are based on evaluation of utilities.
Categories: Social Science

The Covenant of Reason

The Covenant of Reason

In Expected Utility Hypotheses and the Allais Paradox , by M. Allais and O. Hagen , 1979 , pp . 27-145 . Reidel . 1953. “ Le Comportement de l'homme Rationnel Devant le Risque : Critique des Postulats et Axiomes de l'École Américaine ...

Author: Isaac Levi

Publisher: Cambridge University Press

ISBN: 0521576016

Category: Philosophy

Page: 280

View: 655

Isaac Levi is one of the preeminent philosophers in the areas of pragmatic rationality and epistemology. This collection of essays constitutes an important presentation of his original and influential ideas about rational choice and belief. A wide range of topics is covered, including consequentialism and sequential choice, consensus, voluntarism of belief, and the tolerance of the opinions of others. The essays elaborate on the idea that principles of rationality are norms that regulate the coherence of our beliefs and values with our rational choices. The norms impose minimal constraints on deliberation and inquiry, but they also impose demands well beyond the capacities of deliberating agents. This major collection will be eagerly sought out by a wide range of philosophers in epistemology, logic, and philosophy of science, as well as economists, decision theorists, and statisticians.
Categories: Philosophy

Markets Risk and Money

Markets  Risk and Money

College of Business, University of Iowa, Iowa City, Iowa 52242, U.S.A. NOTES 'In the more famous of Allais' problems (1979a, pp. ... in: Allais, M. and Hagen, O. (Eds.), Expected Utility Hypotheses and the Allais Paradox, Dordrecht, ...

Author: Bertrand Munier

Publisher: Springer Science & Business Media

ISBN: 9789401107808

Category: Business & Economics

Page: 374

View: 379

Most of the writings of Maurice Allais, 1988 Nobel Laureate in Economics have only been published in French. Thus to date, economists, management scientists and operations researchers have been severely restricted in gaining access to his work. Markets, Risk and Money presents, for the first time in English, Allais' unconventional views on economic competition, the significance of free markets and overlapping generations, risk psychology, central banking, taxation systems, monetary dynamics and reform. The volume provides a consistent vision of our society and offers readers an evaluation of the impact of Allais' work on our present body of knowledge. Markets, Risk and Money contains contributions from a number of distinguished European and American scholars including Bertrand Munier, Thierry Montbrial, J. Lesourne, Claude Ponsard, Edmond Malinvaud, André Babeau, Marcel Boiteux, Lola L. Lopes, Mark J. Machina, James B. Ramsey, Xavier Freixas, B. Roy and D. Bouyssou, Werner Leinfellner and Jean-Jacques Durand. A biographical sketch and complete bibliography of the author are also included.
Categories: Business & Economics

Recent Developments in the Foundations of Utility and Risk Theory

Recent Developments in the Foundations of Utility and Risk Theory

It may surprise some readers that this was used as an example by Allais already in 1952. See Allais (1979). 2. ... Expected Utility Hypotheses and the Allais Paradox, D. Reidel, Dordrecht, (French original 1953). Allais, M. and 0.

Author: L. Daboni

Publisher: Springer Science & Business Media

ISBN: 9789400946163

Category: Social Science

Page: 406

View: 954

The Second International Conference on Foundations of Utility and Risk Theory was held in Venice, June 1984. This volume presents some of the papers delivered at FUR-84. (The First International Conference, FUR-82, was held in Oslo and some of the papers presented on that occasion were published by Reidel in the volume Foundations of Utility and Risk Theory with Applications, edited by Bernt P. Stigum and Fred Wenst~p). The theory of choice under uncertainty involves a vast range of controversial issues in many fields like economics, philosophy, psychology, mathematics and statistics. The idea of discussing these problems in international conferences has been successful: two conferences have been held and others will follow. The climate of the debate has changed in the meantime, partly as a result of these conferences. It is no more only a question of attacking or defending the neo-Bernoullian assumptions, but also of proposing wider generalizations and including new elements in the analysis of the decision process. For instance Amartya Sen - comparing the two current notions of rationality, internal consistency and self-interest pursuit introduces the concept of reasoning and considers the irrationality which may result from the failure of a positive correspondence between reasoning and choice or from a limited capacity of reasoning. Rationality is also considered with respect to the controversial axiom of strong independence. John C. Harsanyi introduces the concept of practical certainty, i. e.
Categories: Social Science

Risk Decision and Rationality

Risk  Decision and Rationality

The so-called Allais paradox and rational decisions under uncertainty. In M. Allais & O. Hagen (Eds.), Expected utility hypotheses and the Allais Paradox. Dordrecht, Holland: Reidel. Allais, M. (1984). The foundations of the theory of ...

Author: Bertrand Munier

Publisher: Springer Science & Business Media

ISBN: 9789400940192

Category: Business & Economics

Page: 708

View: 746

Decision Theory has considerably developed in the late 1970's and the 1980's. The evolution has been so fast and far-r2aching that it has become increasingly difficult to keep track of the new state of the art. After a decade of new contributions, there was a need for an overview' of the field. This book is intended to fill the gap. The reader will find here thirty~nine selected papers which were given at FUR-III, the third international confe rence on the Foundations and applications of Utility, Risk and decision theories, held in Aix-en-Provence in June 1986. An introductory chapter will provide an overview of the main questions raised on the subject since the 17th Century and more particularly so in the last thirty years, as well as some elementary information on the experimental and theoretical results obtained. It is thus hoped that any reader with some basic background in either Economics, Hanagement or Operations Research will be able to read profitably the thirty-nine other chapters. Psychologists, Sociologists, Social Philosophers and other specialists of the social sciences will also read this book with interest, as will high-level practitioners of decision~making and advanced students in one of the abovementioned fields. An expository survey of this volume will be found at the end of the introductory chapter, so that any of the seven parts of the book can be put by the reader in due perspective.
Categories: Business & Economics

Decision Making from a Cognitive Perspective

Decision Making from a Cognitive Perspective

In M. Allais & O. Hagen (Eds.), Expected utility hypotheses and the Allais Paradox (pp. 27–145). Dordrecht, Holland. Reidel. (Original work published 1952) Allais, M. (1979b). The so-called Allais paradox and rational decisions under ...

Author:

Publisher: Academic Press

ISBN: 0080863833

Category: Psychology

Page: 426

View: 540

The Psychology of Learning and Motivation publishes empirical and theoretical contributions in cognitive and experimental psychology, ranging from classical and instrumental conditioning to complex learning and problem solving. This guest-edited special issue is devoted to research and discussion on decision making from a cognitive perspective. Topics include judgment and decision making with respect to memory processes and techniques, domain-specificity, and confirmation bias. Key Features * Synthesis of decision and cognitive research * New theoretical treatments of critical phenomena * New findings and systematic reviews of past work * Coverage of preference, inference, prediction, and hypothesis-testing * Written by the new leading generation of researchers
Categories: Psychology

Decision Probability and Utility

Decision  Probability and Utility

Allais , M. " The so - called Allais paradox and rational decision under uncertainty , " in Expected Utility Hypotheses and the Allais Paradox , ed . by M. Allais and O. Hagen , Reidel , Dordrecht , 1979b , 437-663 .

Author: Peter Gärdenfors

Publisher: Cambridge University Press

ISBN: 0521336589

Category: Business & Economics

Page: 464

View: 201

Decision theory and the theory of rational choice have recently been the subjects of considerable research by philosophers and economists. However, no adequate anthology exists which can be used to introduce students to the field. This volume is designed to meet that need. The essays included are organized into five parts covering the foundations of decision theory, the conceptualization of probability and utility, pholosophical difficulties with the rules of rationality and with the assessment of probability, and causal decision theory. The editors provide an extensive introduction to the field and introductions to each part.
Categories: Business & Economics

Moral Strata

Moral Strata

In Expected utility hypotheses and the Allais paradox: Contemporary discussions of decisions under uncertainty with Allais' rejoinder, ed. Maurice Allais and Ole Hagen, 27–145. Dordrecht: D. Reidel. Allais, Maurice. 1979b.

Author: John R. Welch

Publisher: Springer

ISBN: 9783319080130

Category: Philosophy

Page: 202

View: 985

This volume recreates the received notion of reflective equilibrium. It reconfigures reflective equilibrium as both a cognitive ideal and a method for approximating this ideal. The ideal of reflective equilibrium is restructured using the concept of discursive strata, which are formed by sentences and differentiated by function. Sentences that perform the same kind of linguistic function constitute a stratum. The book shows how moral discourse can be analyzed into phenomenal, instrumental, and teleological strata, and the ideal of reflective equilibrium reworked in these terms. In addition, the work strengthens the method of reflective equilibrium by harnessing the resources of decision theory and inductive logic. It launches a comparative version of decision theory and employs this framework as a guide to moral theory choice. It also recruits quantitative inductive logic to inform a standard of inductive cogency. When used in tandem with comparative decision theory, this standard can aid in the effort to turn the undesirable condition of reflective disequilibrium into reflective equilibrium.
Categories: Philosophy

Handbook of Risk Theory

Handbook of Risk Theory

Allais M (1979a) The foundations of a positive theory of choice involving risk and a criticism of the postulates and axioms of the American school. In: Allais M, Hagen O (eds) Expected utility hypotheses and the Allais paradox: ...

Author: Sabine Roeser

Publisher: Springer Science & Business Media

ISBN: 9789400714335

Category: Business & Economics

Page: 2748

View: 449

The Handbook of Risk Theory provides a state-of-the-art overview of the epistemological, decision theoretical, ethical and social aspects of Risk. This is the first handbook on the topic written from a philosophical perspective, yet also addresses an interdisciplinary audience.
Categories: Business & Economics