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Which decision theory?

Blavatskyy, P. (2013) Which decision theory? Economics Letters, 120 (1). pp. 40-44.

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A new laboratory experiment is designed to identify the best theories for describing decisions under risk. The experimental design has two noteworthy features: a representative sample of binary choice problems (for fair comparison across theories) and a lottery set with a small number of outcomes and probabilities (for ease of non-parametric estimation). We find that a simple heuristic, rank-dependent utility and expected utility theory provide the best goodness of fit.

Item Type: Journal Article
Publisher: Elsevier
Copyright: © 2013 Elsevier B.V.
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