Boundedly rational expected utility theory

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• dc.contributor.author Navarro-Martinez, Daniel
• dc.contributor.author Loomes, Graham
• dc.contributor.author Isoni, Andrea
• dc.contributor.author Butler, David
• dc.contributor.author Alaou, Larbi
• dc.date.accessioned 2024-02-19T07:24:40Z
• dc.date.available 2024-02-19T07:24:40Z
• dc.date.issued 2018
• dc.description.abstract We build a satisficing model of choice under risk which embeds Expected Utility Theory (EUT) into a boundedly rational deliberation process. The decision maker accumulates evidence for and against alternative options by repeatedly sampling from her underlying set of EU preferences until the evidence favouring one option satisfies her desired level of confidence. Despite its EUT core, the model produces patterns of behaviour that violate standard EUT axioms, while at the same time capturing systematic relationships between choice probabilities, response times and confidence judgments, which are beyond the scope of theories that do not take deliberation into account.
• dc.description.abstract We build a satisficing model of choice under risk which embeds Expected Utility Theory (EUT) into a boundedly rational deliberation process. The decision maker accumulates evidence for and against alternative options by repeatedly sampling from her underlying set of EU preferences until the evidence favouring one option satisfies her desired level of confidence. Despite its EUT core, the model produces patterns of behaviour that violate standard EUT axioms, while at the same time capturing systematic relationships between choice probabilities, response times and confidence judgments, which are beyond the scope of theories that do not take deliberation into account.
• dc.format.mimetype application/pdf
• dc.identifier.citation Navarro-Martinez D, Loomes G, Isoni A, David Butler D, Alaoui L. Boundedly rational expected utility theory. J Risk Uncertain. 2018;57:199-233. DOI: 10.1007/s11166-018-9293-3
• dc.identifier.doi http://dx.doi.org/10.1007/s11166-018-9293-3
• dc.identifier.issn 0895-5646
• dc.identifier.uri http://hdl.handle.net/10230/59128
• dc.language.iso eng
• dc.publisher Nature Research
• dc.relation.ispartof Journal of Risk and Uncertainty. 2018;57:199-233.
• dc.rights This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.rights.uri http://creativecommons.org/licenses/by/4.0/
• dc.subject.keyword Expected utility
• dc.subject.keyword Bounded rationality
• dc.subject.keyword Deliberation
• dc.subject.keyword Probabilistic choice
• dc.subject.keyword Confidence
• dc.subject.keyword Response times
• dc.title Boundedly rational expected utility theory
• dc.type info:eu-repo/semantics/article
• dc.type.version info:eu-repo/semantics/publishedVersion