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77 relations: Adrian Smith (statistician), Affine transformation, Allais paradox, Ambiguity aversion, Amos Tversky, Axiom, Bayes' theorem, Bayesian probability, Behavioral economics, Belief revision, Bruno de Finetti, Cardinal utility, Charles Sanders Peirce, Completeness (order theory), Concave function, Conditional probability, Cumulative prospect theory, Daniel Bernoulli, Daniel Kahneman, Decision theory, Donald Davidson (philosopher), Economics, Elliptical distribution, Entropic risk measure, Expected utility hypothesis, Expected value, Frank P. Ramsey, Gabriel Cramer, Game theory, Generalized expected utility, Hyperprior, Independence of irrelevant alternatives, Indifference price, Isoelastic utility, John von Neumann, Joseph Jastrow, Knightian uncertainty, Long tail, Loss aversion, Loss function, Lottery (probability), Marginal utility, Martin Shubik, Mathematical model, Minimax, Modern portfolio theory, Monty Hall problem, Multilevel model, Nicolaus I Bernoulli, Normal distribution, ..., Ordinal utility, Oskar Morgenstern, Patrick Suppes, Paul Slovic, Prospect theory, Rank-dependent expected utility, Rational choice theory, Regret (decision theory), Risk aversion, Risk premium, Robust decision-making, Scenario analysis, Scott Plous, Sensitivity analysis, Set theory, Sidney Siegel, St. Petersburg paradox, Stanford University Press, Statistical risk, Subjective expected utility, The American Economic Review, Transitive relation, Two-moment decision model, Uncertainty, Variance, Von Neumann–Morgenstern utility theorem, William Stanley Jevons. Expand index (27 more) »
Adrian Smith (statistician)
Sir Adrian Frederick Melhuish Smith, FRS (born 1946) is a distinguished British statistician and was Principal of Queen Mary, University of London from 1998 to 2008.
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Affine transformation
In geometry, an affine transformation, affine mapBerger, Marcel (1987), p. 38.
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Allais paradox
The Allais paradox is a choice problem designed by to show an inconsistency of actual observed choices with the predictions of expected utility theory.
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Ambiguity aversion
In decision theory and economics, ambiguity aversion (also known as uncertainty aversion) is a preference for known risks over unknown risks.
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Amos Tversky
Amos Nathan Tversky (עמוס טברסקי; March 16, 1937 – June 2, 1996) was a cognitive and mathematical psychologist, a student of cognitive science, a collaborator of Daniel Kahneman, and a figure in the discovery of systematic human cognitive bias and handling of risk.
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Axiom
An axiom or postulate is a statement that is taken to be true, to serve as a premise or starting point for further reasoning and arguments.
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Bayes' theorem
In probability theory and statistics, Bayes’ theorem (alternatively Bayes’ law or Bayes' rule, also written as Bayes’s theorem) describes the probability of an event, based on prior knowledge of conditions that might be related to the event.
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Bayesian probability
Bayesian probability is an interpretation of the concept of probability, in which, instead of frequency or propensity of some phenomenon, probability is interpreted as reasonable expectation representing a state of knowledge or as quantification of a personal belief.
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Behavioral economics
Behavioral economics studies the effects of psychological, cognitive, emotional, cultural and social factors on the economic decisions of individuals and institutions and how those decisions vary from those implied by classical theory.
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Belief revision
Belief revision is the process of changing beliefs to take into account a new piece of information.
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Bruno de Finetti
Bruno de Finetti (13 June 1906 – 20 July 1985) was an Italian probabilist statistician and actuary, noted for the "operational subjective" conception of probability.
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Cardinal utility
In economics, a cardinal utility function or scale is a utility index that preserves preference orderings uniquely up to positive affine transformations.
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Charles Sanders Peirce
Charles Sanders Peirce ("purse"; 10 September 1839 – 19 April 1914) was an American philosopher, logician, mathematician, and scientist who is sometimes known as "the father of pragmatism".
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Completeness (order theory)
In the mathematical area of order theory, completeness properties assert the existence of certain infima or suprema of a given partially ordered set (poset).
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Concave function
In mathematics, a concave function is the negative of a convex function.
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Conditional probability
In probability theory, conditional probability is a measure of the probability of an event (some particular situation occurring) given that (by assumption, presumption, assertion or evidence) another event has occurred.
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Cumulative prospect theory
Cumulative prospect theory (CPT) is a model for descriptive decisions under risk and uncertainty which was introduced by Amos Tversky and Daniel Kahneman in 1992 (Tversky, Kahneman, 1992).
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Daniel Bernoulli
Daniel Bernoulli FRS (8 February 1700 – 17 March 1782) was a Swiss mathematician and physicist and was one of the many prominent mathematicians in the Bernoulli family.
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Daniel Kahneman
Daniel Kahneman (דניאל כהנמן; born March 5, 1934) is an Israeli-American psychologist notable for his work on the psychology of judgment and decision-making, as well as behavioral economics, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences (shared with Vernon L. Smith).
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Decision theory
Decision theory (or the theory of choice) is the study of the reasoning underlying an agent's choices.
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Donald Davidson (philosopher)
Donald Herbert Davidson (March 6, 1917 – August 30, 2003) was an American philosopher.
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Economics
Economics is the social science that studies the production, distribution, and consumption of goods and services.
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Elliptical distribution
In probability and statistics, an elliptical distribution is any member of a broad family of probability distributions that generalize the multivariate normal distribution.
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Entropic risk measure
In financial mathematics, the entropic risk measure is a risk measure which depends on the risk aversion of the user through the exponential utility function.
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Expected utility hypothesis
In economics, game theory, and decision theory the expected utility hypothesis, concerning people's preferences with regard to choices that have uncertain outcomes (gambles), states that if specific axioms are satisfied, the subjective value associated with an individual's gamble is the statistical expectation of that individual's valuations of the outcomes of that gamble.
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Expected value
In probability theory, the expected value of a random variable, intuitively, is the long-run average value of repetitions of the experiment it represents.
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Frank P. Ramsey
Frank Plumpton Ramsey (22 February 1903 – 19 January 1930) was a British philosopher, mathematician and economist who made fundamental contributions to abstract algebra before his death at the age of 26.
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Gabriel Cramer
Gabriel Cramer (31 July 1704 – 4 January 1752) was a Genevan mathematician.
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Game theory
Game theory is "the study of mathematical models of conflict and cooperation between intelligent rational decision-makers".
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Generalized expected utility
Generalized expected utility is a decision-making metric based on any of a variety of theories that attempt to resolve some discrepancies between expected utility theory and empirical observations, concerning choice under risky (probabilistic) circumstances.
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Hyperprior
In Bayesian statistics, a hyperprior is a prior distribution on a hyperparameter, that is, on a parameter of a prior distribution.
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Independence of irrelevant alternatives
The independence of irrelevant alternatives (IIA), also known as binary independence or the independence axiom, is an axiom of decision theory and various social sciences.
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Indifference price
In finance, indifference pricing is a method of pricing financial securities with regard to a utility function.
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Isoelastic utility
In economics, the isoelastic function for utility, also known as the isoelastic utility function, or power utility function is used to express utility in terms of consumption or some other economic variable that a decision-maker is concerned with.
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John von Neumann
John von Neumann (Neumann János Lajos,; December 28, 1903 – February 8, 1957) was a Hungarian-American mathematician, physicist, computer scientist, and polymath.
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Joseph Jastrow
Joseph Jastrow (January 30, 1863 – January 8, 1944) was a Polish-born American psychologist, noted for inventions in experimental psychology, design of experiments, and psychophysics.
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Knightian uncertainty
In economics, Knightian uncertainty is an informal term to distinguish true unknowns from more quantifiable risks, e.g. statistical noise or a parameter's confidence interval.
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Long tail
In statistics and business, a long tail of some distributions of numbers is the portion of the distribution having a large number of occurrences far from the "head" or central part of the distribution.
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Loss aversion
In cognitive psychology and decision theory, loss aversion refers to people's tendency to prefer avoiding losses to acquiring equivalent gains: it is better to not lose $5 than to find $5.
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Loss function
In mathematical optimization, statistics, econometrics, decision theory, machine learning and computational neuroscience, a loss function or cost function is a function that maps an event or values of one or more variables onto a real number intuitively representing some "cost" associated with the event.
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Lottery (probability)
In expected utility theory, a lottery is a discrete distribution of probability on a set of states of nature.
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Marginal utility
In economics, utility is the satisfaction or benefit derived by consuming a product; thus the marginal utility of a good or service is the change in the utility from an increase in the consumption of that good or service.
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Martin Shubik
Martin Shubik (born March 24, 1926) is an American economist, who is Professor Emeritus of Mathematical Institutional Economics at Yale University.
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Mathematical model
A mathematical model is a description of a system using mathematical concepts and language.
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Minimax
Minimax (sometimes MinMax or MM) is a decision rule used in decision theory, game theory, statistics and philosophy for minimizing the possible loss for a worst case (maximum loss) scenario.
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Modern portfolio theory
Modern portfolio theory (MPT), or mean-variance analysis, is a mathematical framework for assembling a portfolio of assets such that the expected return is maximized for a given level of risk.
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Monty Hall problem
The Monty Hall problem is a brain teaser, in the form of a probability puzzle, loosely based on the American television game show Let's Make a Deal and named after its original host, Monty Hall.
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Multilevel model
Multilevel models (also known as hierarchical linear models, nested data models, mixed models, random coefficient, random-effects models, random parameter models, or split-plot designs) are statistical models of parameters that vary at more than one level.
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Nicolaus I Bernoulli
Nicolaus Bernoulli (born 21 October 1687 in Basel, died 29 November 1759 in Basel; also spelled Nicolas or Nikolas), was a Swiss mathematician and was one of the many prominent mathematicians in the Bernoulli family.
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Normal distribution
In probability theory, the normal (or Gaussian or Gauss or Laplace–Gauss) distribution is a very common continuous probability distribution.
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Ordinal utility
In economics, an ordinal utility function is a function representing the preferences of an agent on an ordinal scale.
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Oskar Morgenstern
Oskar Morgenstern (January 24, 1902 – July 26, 1977) was a German-born economist.
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Patrick Suppes
Patrick Colonel Suppes (March 17, 1922 – November 17, 2014) was an American philosopher who made significant contributions to philosophy of science, the theory of measurement, the foundations of quantum mechanics, decision theory, psychology and educational technology.
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Paul Slovic
Paul Slovic (born 1938 in Chicago) is a professor of psychology at the University of Oregon and the president of Decision Research.
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Prospect theory
Prospect theory is a behavioral economic theory that describes the way people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are known (.
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Rank-dependent expected utility
The rank-dependent expected utility model (originally called anticipated utility) is a generalized expected utility model of choice under uncertainty, designed to explain the behaviour observed in the Allais paradox, as well as for the observation that many people both purchase lottery tickets (implying risk-loving preferences) and insure against losses (implying risk aversion).
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Rational choice theory
Rational choice theory, also known as choice theory or rational action theory, is a framework for understanding and often formally modeling social and economic behavior.
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Regret (decision theory)
In decision theory, on making decisions under uncertainty—should information about the best course of action arrive after taking a fixed decision—the human emotional response of regret is often experienced.
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Risk aversion
In economics and finance, risk aversion is the behavior of humans (especially consumers and investors), when exposed to uncertainty, in attempting to lower that uncertainty.
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Risk premium
For an individual, a risk premium is the minimum amount of money by which the expected return on a risky asset must exceed the known return on a risk-free asset in order to induce an individual to hold the risky asset rather than the risk-free asset.
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Robust decision-making
Robust decision-making (RDM) is an iterative decision analytic framework that aims to help identify potential robust strategies, characterize the vulnerabilities of such strategies, and evaluate the tradeoffs among them.
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Scenario analysis
Scenario analysis is a process of analyzing possible future events by considering alternative possible outcomes (sometimes called "alternative worlds").
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Scott Plous
Scott Plous is an academic social psychologist, currently working as a Professor of Psychology at the Department of Psychology, Wesleyan University.
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Sensitivity analysis
Sensitivity analysis is the study of how the uncertainty in the output of a mathematical model or system (numerical or otherwise) can be apportioned to different sources of uncertainty in its inputs.
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Set theory
Set theory is a branch of mathematical logic that studies sets, which informally are collections of objects.
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Sidney Siegel
Sidney Siegel (4 January 1916 in New York City – 29 November 1961) was an American psychologist who became especially well known for his work in popularising non-parametric statistics for use in the behavioural sciences.
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St. Petersburg paradox
The St.
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Stanford University Press
The Stanford University Press (SUP) is the publishing house of Stanford University.
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Statistical risk
Statistical risk is a quantification of a situation's risk using statistical methods.
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Subjective expected utility
In decision theory, subjective expected utility is the attractiveness of an economic opportunity as perceived by a decision-maker in the presence of risk.
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The American Economic Review
The American Economic Review is a peer-reviewed academic journal of economics.
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Transitive relation
In mathematics, a binary relation over a set is transitive if whenever an element is related to an element and is related to an element then is also related to.
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Two-moment decision model
In decision theory, economics, and finance, a two-moment decision model is a model that describes or prescribes the process of making decisions in a context in which the decision-maker is faced with random variables whose realizations cannot be known in advance, and in which choices are made based on knowledge of two moments of those random variables.
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Uncertainty
Uncertainty has been called "an unintelligible expression without a straightforward description".
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Variance
In probability theory and statistics, variance is the expectation of the squared deviation of a random variable from its mean.
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Von Neumann–Morgenstern utility theorem
In decision theory, the von Neumann-Morgenstern utility theorem shows that, under certain axioms of rational behavior, a decision-maker faced with risky (probabilistic) outcomes of different choices will behave as if he or she is maximizing the expected value of some function defined over the potential outcomes at some specified point in the future.
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William Stanley Jevons
William Stanley Jevons FRS (1 September 1835 – 13 August 1882) was an English economist and logician.
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Certainty equivalents, EU theory, Expected utility, Expected utility theorem, Expected utility theory, Moral expectation, Neumann-Morgenstern utility, Neumann–Morgenstern utility, Nuemann-Morgenstern Utility, VNM, Von Neumann-Morgenstern Utility, Von Neumann-Morgenstern utility function.
References
[1] https://en.wikipedia.org/wiki/Expected_utility_hypothesis
