Nonlinear decision weights in choice under uncertainty

Article Abstract:

Decision-making in the face of uncertainty was examined with particular focus on the nonlinearity of decision weights. Extant research literature on decision-making under uncertainty indicates that the psychological weight linked to an event tends to differ from the probability of the event. Such weights become nonlinear due to the subadditivity of probability judgments or the overweighting of small probabilities and the underweighting of medium and large probabilities. A two-phase model integrating these two sources of error was developed, which uses a nonadditive subjective probability measure to map events into judged probabilities, and a probability weighting function to map judged probabilities into decision weights. The findings indicate that people violate subjective expected utility in a systematic manner.

Decision-making, Decision making, Choice (Psychology), Uncertainty

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Knowledge maps

Article Abstract:

The use of influence diagrams and knowledge maps to gather the diverse information patterns of groups and individuals is examined. Redundant knowledge maps are used to handle cases where the information under assessment does not correspond to any proper diagram assessment order. Disjoint knowledge maps are used where complete joint distribution is not required for particular assessments. Knowledge maps are found to facilitate knowledge presentation and implication analysis.

Management science, Statistical decision, Statistical decision theory

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