A contextual uncertainty condition for behavior under risk
Article Abstract:
A problem is considered in which a person has to choose between uncertain financial prospects while faced with two independent contextual uncertainties regarding the size of the person's existing wealth. With one of these uncertainties having a larger spread than the other, granted that these uncertainties can be resolved before a decision is made, the person will have to choose between resolving the uncertainty with the bigger spread and the one with the smaller spread. As a possible solution to this problem, the intuitive idea that it is more favorable to resolve the bigger contextual uncertainty is analyzed. Findings show that only one utility function that meets the aforementioned condition and that is also growing and risk averse at all levels of wealth.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1995
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Putting a premium on regret
Article Abstract:
Bell defends his regret model against criticisms put forth by Paul Anand in the January 1985 issue of Management Science magazine. The sources of controversy lie in differing definitions of regret, personal sacrifice and disappointment. Bell argues that regret and disappointment are distinct properties in a decision model, and does not revise his model to fit the criticism offered by Anand.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1985
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Testing regret
Article Abstract:
The regret model proposed by David E. Bell in a 1983 issue of Management Science magazine is analyzed from the standpoint of parametric accoutrements and found to lack validity. Four reasons for discounting Bell's theories relative to the connection between regret and decision resolution are explored, and four tests are offered for application to other models of decision-theory regret.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1985
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