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paternalism/Humean-view-of-preference
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- Risk averse for gains, risk seeking for losses
- Christiane, Veronika I
paternalism/Humean-view-of-preference: favor non-paternalism. Argue that preferences should be taken as stated, where we seek to have people well-informed when choosing. But no paternalism. The abstract writes: “we take the perspective that analysts should avoid making judgments about whether values are “rational” or “irrational.” ... More generally, behavioral research has led some to argue for a more paternalistic approach to policy analysis. We argue instead for continued focus on describing the preferences of those affected, while working to ensure that these preferences are based on knowledge and careful reflection.” End of §3 argues for consumer sovereignty. P. 1412 1st column argues that, if WTP-WTA discrepancy due to different reference point (income effect cannot explain), then the right perspective depends on what the reference point in reality is. I disagree! The discrepancy signals a bias. P. 1413 2nd column 2nd para, argues that WTP can never be more than the wealth possessed, and WTA has no limit, and takes this as argument in favor of WTP. I would think that it is an argument against WTP. %} Robinson, Lisa A. & James K. Hammitt (2011) “Behavioral Economics and Regulatory Analysis,” Risk Analysis 31, 1408–1422. {% utility elicitation; beginning gives some nice refs.; theoretical discussion is confused and hard to follow. %} Robison, Lindon J. (1982) “An Appraisal of Expected Utility Hypothesis Tests Constructed from Responses to Hypothetical Questions and Experimental Choices,” American Journal of Agricultural Economics 64, 367–375. {% %} Robles, Elias, Perla Amalia Vargas, & Rafael Bejarano (2009) “Within-Subject Differences in Degree of Delay Discounting as a Function of Order of Presentation of Hypothetical Cash Rewards,” Behavioural Processes 81, 260–263. {% N = 2012 subjects; Study JEM (joint evaluation of some things —reduction of road risk) versus SEM (separate evaluation, each in isolation; called monadic in marketing). SEM shows insensitivity towards relevant quantities, JEM shows context dependence. Give an explanation in terms of choice errors. %} Robles-Zurita, José Antonio, José Luis Pinto, José María Abellán-Perpiñán, Jorge Martínez-Pérez, & Fernando I. Sánchez-Martínez (2014) “Improving Scope Sensitivity in Contingent Valuation: Joint and Separate Evaluation of Health States,” working paper. {% This paper presents models in which it is plausible that a utility function to evaluate outcomes is related to expected offspring. It assumes statistical independence between offspring of different individuals. Then those individuals with highest expected nr. of offspring will outnumber all others, as is well-known. The statistical independence is, of course, not completely valid. Species of which some individuals do not maximize offspring but sacrifice this number to increasing the offspring of other individuals, (e.g. by developing and distributing ideas and neglecting the family, as some researchers do), will outperform species of which all individuals do nothing but maximizing own offspring. P. 902: “The stochastic nature of reproduction is identified as a key reason why a built-in utility function is necessary …Finally, it is argued that a hedonic interpretation of utility is persuasive in this biological setting.” §III.D on pp. 908-909 indeed argues for it. %} Robson, Arthur J. (2001) “Why Would Nature Give Individuals Utility Functions?,” Journal of Political Economy 109, 900–914. {% Give evolutionary/biological basis to discounting, with individuals more impatient than groups. %} Robson, Arthur J. & Balázs Szentes (2014) “A Biological Theory of Social Discounting,” American Economic Review 104, 4184–4204. {% Evolution can lead to discounting expected utility with discount rate related to population growth and death rate. Aggregate uncertainty about death rates can lead to deviations from constant discounting. %} Robson, Arthur J. & Larry Samuelson (2009) “The Evolution of Time Preference with Aggregate Uncertainty,” American Economic Review 99, 1925–1953. {% Redo the Rogers (1994) analysis with some other assumptions about (homogeneity of) utility and other things. conservation of influence: generalize also criterion of reproductive value. %} Robson, Arthur J. & Balázs Szentes (2008) “Evolution of Time Preference by Natural Selection: Comment,” American Economic Review 98, 1178–1188. {% Incentives: do both with and without real incentives. Each subject did three choices, each of them paid under real incentives (income effect). ambiguity seeking: If subjects are first endowed with the ambiguous Ellsberg gamble, and are asked if they want to exchange it for the unambiguous one, then most don’t want that. In terms of final wealth, they then exhibit ambiguity seeking. The main conclusion can be that loss aversion dominates ambiguity aversion. The authors use the term source preference differently than prospect theory does. In this paper it means whether it matters if subjects just got a prior endowment or had selected it. An alternative title for this paper could have been: “The status quo bias dominates ambiguity aversion.” suspicion under ambiguity: p. 181: they controlled for suspicion in Ellsberg choices both by letting subjects select color to gambe on, and by gambling on all colors. Unfortunately, in the latter case they really played all three choices, so that income effects and, in particular, hedging may have been going on. reflection at individual level for ambiguity: Experiment 1 gives no data. Experiment 2 does not give it explicitly. Maybe it can be derived from the data given in Tables 5 and 6, but it was too complex to me (would have to read line by line) how the groups and treatments had been organized. This similarly holds for Experiment 3. %} Roca, Mercè, Robin M. Hogarth, & A. John Maule (2006) “Ambiguity Seeking as a Result of the Status Quo Bias,” Journal of Risk and Uncertainty 32, 175–194. {% Study in more detail the nice finding of Roca, Hogarth, & Maule (2006). %} Roca, Mercè & A. John Maule (2009) “The Effects of Endowment on the Demand for Probabilistic Information,” Organizational Behavior and Human Decision Processes 109, 56–66. {% %} Rockafellar, R. Tyrrell (1970) “Convex Analysis.” Princeton University Press, Princeton NJ. {% Risk averse for gains, risk seeking for losses: they find it. They confirm common ratio, preference reversal, and reflection. Teams are not closer to EU than individuals, but they do get higher EV at lower risk so in that sense are better. loss aversion: erroneously thinking it is reflection: p. 416 confuses reflection (what they do) with loss aversion, calling it reference point effect, and even explicitly stating the confusion: “the reference point effect (also referred to as loss aversion or reflection effect).” %} Rockenbach, Bettina, Abdolkarim Sadrieh, & Barbara Mathauschek (2007) “Teams Take the Better Risks,” Journal of Economic Behavior and Organization 63, 412–422. {% They use RIS. ambiguity seeking for losses: they claim so, but it is only mismodeling of outcomes and utility. First two experiments mainly redo Fox & Tversky (1995) with joint and separate evaluation of prospects. They do not replicate the FT finding but find that separate evaluation still gives ambiguity aversion. They suggest too much that this is their own idea, citing FT too late and vaguely at the end of §3 p. 279. P. 271 argues that not just EU should be maximized, but sometimes also variance of utility should be considered, which is to be minimized if we are above our needs and is to be maximized if we are below our needs. The authors simply misunderstand utility. If there is a level of needs below which everything is very bad then this should be incorporated in our utility function, e.g. being steep or having a jump below that level of needs, and we still just maximize EU. What they say then is correct in terms of variance of outcomes, but not in terms of variance of utility contrary to what they say. Wakker (2010 Comment 2.6.5) criticizes such considerations of variance of utility. In their experiments, ambiguity was generated by providing intervals, with center equal to objective probability. Unfortunately, subjects could not choose the color to gamble on, so that there can be suspicion. (suspicion under ambiguity; P. 283 explains that Rode 1996 had done it properly.) Experiment 4: P. 289 end of §6 explains that they generate the same probability distributions over the same outcomes with only different reference points (they don’t use the latter term). Those quasi-reference points are however presented as different levels of needs to the subjects where subjects need to attain that level for some important purpose (making it to a second stage of some nice prospect). So it is not at all the same outcomes but it is just very different situations in which outcomes mean very different things, with very different utilities. This rather than any attitude to ambiguity explains their findings. %} Rode, Catrin, Leda Cosmides, Wolfgang Hell, John Tooby (1999) “When and why Do People Avoid Unknown Probabilities in Decisions under Uncertainty? Testing some Predictions from Optimal Foraging Theory,” Cognition 72, 269–304. {% Problems with infinity; p. 1 gives references to people discussing matters,. %} Röd, Wolfgang (1990) “Das Problem des Unendlichen bei Kant,” Deutsche Zeitschrift für Philosophie 38, 497–505. {% revealed preference: many references to empirical violations. Shows how proper parameter choices of decision field theory can accommodate them. paternalism/Humean-view-of-preference: they show that, by accounting for contextual effects as described by decision field theory, we can get back a context-free psychophysical function. %} Roe, Robert M., Jerome R. Busemeyer, & James T. Townsend (2001) “Multialternative Decision Field Theory: A Dynamic Connectionist Model of Decision Making,” Psychological Review 108, 370–392. {% time preference %} Roelofsma, Peter H.M.P. (1994) “Intertemporal Choice.” Ph.D. dissertation, Free University of Amsterdam, the Netherlands. {% time preference; DC = stationarity = time consistency %} Roelofsma, Peter H.M.P. (1996) “Modelling Intertemporal Choices: An Anomaly Approach,” Acta Psychologica 93, 5–22. {% time preference %} Roelofsma, Peter H.M.P. & Gideon B. Keren (1995) “Framing and Time-Inconsistent Preferences.” In Jean-Paul Caverni, Maya Bar-Hillel, Francis Hutton Barron, & Helmut Jungermann (eds.) Contributions to Decision Making—I, 351–361, Elsevier, Amsterdam. {% %} Roelofsma, Peter H.M.P. & Daniel Read (2000) “Intransitive Intertemporal Choice,” Journal of Behavioral Decision Making 13, 161–177. {% %} Röell, Ailsa (1987) “Risk Aversion in Quiggin and Yaari’s Rank-Order Model of Choice under Uncertainty,” Economic Journal 97 (suppl), 143–160. {% Nicely point out that whereas maximum of maxima is maximum, and average of averages is average, things are complex when these operations are mixed, as when evaluating decision trees. Propose statistical ways through choices of random paths to evaluate decision trees. %} Rogard, Erwann, Andrew Gelman, & Hao Lu (2007) “Evaluation of Multilevel Decision Trees, Journal of Statistical Planning and Inference 137, 1151–1160. {% time preference; in a kind of evolutionary market, about 2 percent discounting (ln 2 per generation) comes out as optimal. Young adults should discount more strongly than elderly. %} Rogers, Alan R. (1994) “Evolution of Time Preference by Natural Selection,” American Economic Review 84, 460–481. {% %} Rohde, Kirsten I.M. (2010) “The Hyperbolic Factor: a Measure of Time Inconsistency,” Journal of Risk and Uncertainty 41, 125–140. {% Shows that the very famous Fehr-Schmidt welfare model in fact is a special case of rank-dependent utility with monotonicity relaxed. So, in the generalization of De Waegenaere & Wakker (2001). %} Rohde, Kirsten I.M. (2010) “A Preference Foundation for Fehr and Schmidt’s Model of Inequity Aversion,” Social Choice and Welfare, Social Choice and Welfare 34, 537–547. {% %} Rohde, Kirsten I.M. (2008) “Arbitrage Opportunities in Frictionless Markets with Sophisticated Investors,” Economic Theory 34, 389–393. {% For many purposes (when evaluating intertemporal choice with one nonzero outcome), not the discount function, but its logarithm, plays a role analogous to utility in expected utility. Prelec (2004) demonstrated this, for instance regarding the Pratt-Arrow index and convexity of the logarithm of the discount function. This paper considers convexity of the discount function rather than of its logarithm. The latter is equivalent to something called decreasing relative impatience. It is also equivalent to something called spread seeking. Although equivalent mathematically in the model assumed, the conditions seem to be different intuitively. %} Rohde, Kirsten I.M. (2009) “Decreasing Relative Impatience,” Journal of Economic Psychology 30, 831–839. {% equity-versus-efficiency: one of the topics. It is an experiment on how subjects think about social risks, ex ante fairness, ex post fairness, with real incentives. Subjects are sensitive not only to risk level, but also to inequality in risk. Ex ante they are averse to such inequality and risk, but ex post they are, surprisingly, seeking. %} Rohde, Ingrid M. T. & Kirsten I. M. Rohde (2015) “Managing Social Risks – Tradeoffs between Risks and Inequalities,” Journal of Risk and Uncertainty 51, 103–124. {% %} Rohner, Dominic, Mathias Thoenig, & Fabrizio Zilibotti (2013) “War Signals: A Theory of Trade, Trust, and Conflict,” Review of Economic Studies 80, 1114–1147. {% During lecture on Jan. 31, 2018, said: “Psychologists don’t just stop at the facts.” %} Romagnoli, Giorgia (2018) {% foundations of probability %} Romeijn, Jan-Willem (2005) “Bayesian Inductive Logic,” Ph.D. dissertation. {% game theory can/cannot be seen as decision under uncertainty; updating: does so for RDU (she uses the term CEU (Choquet expected utility)), using a Sarin-Wakker updating rule. %} Romm, Aylit Tina (2014) “An Interpretation of Focal Point Responses as Non-Additive Beliefs,” Judgment and Decision Making 9, 387–402. {% dynamic consistency: favors abandoning RCLA: gives empirical evidence that reduction axiom is violated; seems to be test of event commutativity. %} Ronen, Joshua (1971) “Some Effects of Sequential Aggregation in Accounting and Decision-Making,” Journal of Accounting Research 9, 307–332. {% Sequence bias in compound events; seems to be test of event commutativity; uses same data set as Ronen (1971). %} Ronen, Joshua (1973) “Effects of Some Probability Displays on Choices,” Organizational Behavior and Human Performance 9, 1–15. {% May have been the first to say: “It is difficult to make predictions, especially about the future.” %} Ronner, Markus M. (1918) {% %} Roorda, Berend & Reinoud Joosten (2014) Tuned Risk Aversion as Interpretation of Non-Expected Utility Preferences,” in preparation. {% %} Roosmalen, Mariëlle S. van (2005) “Shared Decision Making in Women Testing for a BRCA1/2 Mutation,” Ph.D. dissertation, Medical Department, University of Nijmegen, the Netherlands. {% simple decision analysis cases using EU: bit complex. %} Roosmalen, Mariëlle S. van, Lia C.G. Verhoef, Peep F.M. Stalmeier, Nicole Hoogerbrugge, & Willem A.J. van Daal (2002) “Decision Analysis of Prophylactic Surgery or Screening for BRCA1 Mutation Carriers: A More Prominent Role for Oophorectomy,” Journal of Clinical Oncology 20, 2092–2100. {% DOI: http://dx.doi.org/10.1098/rsbl.2010.0927 16 chimpanzees and 14 bonobos could sometimes take from a bowl with 100% chance of a banana, or from 50% of a banana, or from 0% chance of a banana. Some later they got the option of either choosing from a bowl from which the lid had not been removed, of from the 50% bowl. They preferred the latter. %} Rosati, Alexandra & Brian Hare (2010) “Chimpanzees and Bonobos Distinguish between Risk and Ambiguity,” Biology Letters, 2010 . {% revealed preference %} Rose, Hugh (1958) “Consistency of Preference: The Two-Commodity Case,” Review of Economic Studies 25, 124–125. {% %} Rose, Jason P. (2012) “Debiasing Comparative Optimism and Increasing Worry for Health Outcomes,” Journal of Health Psychology 17, 1121–1131. {% intertemporal separability criticized: central in habit formation of course. A reference point is developed that is a linear combination of past consumption. Properly discriminates between dynamic consistency and other conditions such as stationarity. %} Rozen, Kareen (2010) “Foundations of Intrinsic Habit Formation,” Econometrica 78, 1341–1373. {% Find that loss aversion works well to explain macroeconomic data. Use utility linear for gains and losses. %} Rosenblatt-Wisch, Rina (2008) “Loss Aversion in Aggregate Macroeconomic Time Series,” European Economic Review 52, 1140–1159. {% losses from prior endowment mechanism: seems that some subjects received the prior endowment two weeks before the experiment, and others at the beginning. Those who received it two weeks before were more risk averse. Suggests that the latter group integrated the payoffs less. %} Rosenboim, Mosi, & Tal Shavit (2012) “Whose Money Is It anyway? Using Prepaid Incentives in Experimental Economics to Create a Natural Environment,” Experimental Economics 15, 145–157. {% Show that taking publically announced reserve price as reference point in auctions improves fit. %} Rosenkrantz, Stephanie & Patrick W. Schmitz (2007) “Reserve Prices in Auctions as Reference Points,” Economic Journal 117, 637–653. {% Comes close to find that capacity being convex implies that its Choquet integral is minimum over core integrals (e.g., Theorem 1.1, Corollary 2.3) but does not really state that. %} Rosenmüller, Joachim (1971) “On Core and Value,” Methods of Operations Research 9, 84–104. {% %} Rosenmüller, Joachim (1972) “Some Properties of Convex Set Functions, Part II,” Methods of Operations Research 17, 287–307. {% foundations of statistics; bias because negative results cannot be published %} Rosenthal, Robert (1979) “The “File Drawer Problem” and Tolerance for Null Results,” Psychological Bulletin 86, 638–641. {% Text book on analysis of variance. %} Rosenthal, Robert & Ralph L. Rosnow (1991) “Essentials of Behavioral Research: Methods and Data Analysis;” 2nd edn. McGraw-Hill, New York. {% Seems to be: decision under stress; descriptive studies of coping with catastrophes, with general types of processing and coping. %} Rosenthal, Uriel & Menno van Duin (1989) “Decision Making in Technological Emergencies.” In Charles A.J. Vlek & George Cvetkovich (eds.) Social Decision Methodology for Technological Projects, 277–295, Kluwer, Dordrecht. {% Seems to be as follows: Take discounted utility of (CtCmin)/(1), where Ct is money spent on consumption in time t, of households that have bullocks in India. Cmin is minimal consumption for survival. Idea is that if Ct threatens to be below, family will borrow from others, or be helped by others -I guess. There is also risk, and expected utility. Investigate if insurance helps families to optimally invest in bullocks, and find it doesn’t. %} Rosenzweig, Mark R. & Kenneth I. Wolpin (1993) “Credit Market Constraints, Consumption Smoothing, and the Accumulation of Durable Production Assets in Low-Income Countries: Investments in Bullocks in India,” Journal of Political Economy 101, 223–244. {% inverse-S: finds over-betting on small-probability gain horses (p. 604: for p < .03) Rosett, Richard N. (1965) “Gambling and Rationality,” Journal of Political Economy 73, 595–607. {% SEU = SEU: says on p. 534 that transforming probabilities is still SEU. Argues that Yaari’s 1965 (QJE) result confirms overestimation of small probabilities, but need not reject the Friedman/Savage (1948) utility hypothesis if the participants of Yaari’s experiment were involved in other side gambles unknown to the experimentor (hidden stakes in Kadane & Winkler’s 1988 sense). It is, however, generally accepted nowadays to ignore hidden stakes, mostly because of the isolation effect. Therefore, whereas Rosett is formally right, his point should not affect Yaari’s finding. %} Rosett, Richard N. (1967) “The Friedman-Savage Hypothesis and Convex Acceptance Sets: A Reconciliation,” Quarterly Journal of Economics 81, 534–535. {% inverse-S: data support finding of Yaari which suggests inverse-S probability weighting: sets of lotteries preferred to status quo is convex suggesting concave utility but decision weights, inferrable from tangent of convex set of lotteries, differ from objective probabilities and suggest overweighting of low probabilities. Nice opening sentence: “ … are the modest final product of an initially ambitious attempt …” real incentives: random incentive system Highly remarkable is the last paragraph on p. 482. It shows that Edwards fixed-probability-transformation model violates stochastic dominance for the special case of overestimation of small probabilties (so it already has part of Fishburn 1978). This latter model is described as Yaari’s hypothesis. Probability-weighted means weighting through “subjective probabilities” which are transforms of objective probabilities: Yaari’s hypothesis is appealing as long as we confine our attention to gambles with only two outcomes. If we consider gambles with many outcomes we need to deal with the problems that all the probabilities may be small and if they are all subjectively exaggerated, their sum will exceed one. To trace the implications of this anomaly, it is necessary to specify the rule for calculating expected values. If, for example, expected utility is calculated simply by summing the probability-weighted utilities of outcomes, it should be possible to persuade a gambler that by giving away money he makes himself better off. If his initial wealth is X0 and his utility is U(X0), it will be possible to find a set of pay-offs, Xi < X0, i = 1, …, n, such that piU(Xi) > U(X0). This happens because pi > 1 and we can select the Xi to make U(Xi) as close to U(X0) as we please. Next he goes on to show that adding a constant to U can affect preference. Conclusion points out importance of framing (“exact conditions of the experiment”) %} Rosett, Richard N. (1971) “Weak Experimental Verification of the Expected Utility Hypothesis,” Review of Economic Studies 38, 481–492. {% %} Roskam, Edward E.Ch.I. (1968) “Metric Analysis of Ordinal Data in Psychology.” VAM, Voorschoten. {% %} Roskies, Ralph (1965) “A Measurement Axiomatization for an Essentially Multiplicative Representation of Two Factors,” Journal of Mathematical Psychology 2, 266–276. {% %} Ross, Lee, David Greene, & Pamela House (1977) “The ‘False Consensus Effect’: An Egocentric Bias in Social Perception and Attribution Processes,” Journal of Experimental Social Psychology 13, 279–301. {% %} Ross, Stephen A. (1981) “Some Stronger Measures of Risk Aversion in the Small and in the Large with Applications,” Econometrica 49, 621–638. {% %} Ross, Lee D., Mark R. Lepper, Fritz Strack, & Julia Steinmetz (1977) “Social Explanation and Social Expectation: Effects of Real and Hypothetical Explanations on Subjective Likelihood,” Journal of Personality and Social Psychology 35, 817–829. {% % Seem to point out that correlation of behavior is usually small. %} M %}
Ross, Lee & Richard E. Nisbett (1991) “The Person and the Situation: Perspectives of Social Psychology.” McGraw-Hill, New York. {% %} Rosser, J. Barkley (1993) “Belief: Its Role in Economic Thought and Action,” American Journal of Economics and Sociology 52, 355–368. {% intuitive versus analytical decisions; seem to use a “psychometric approach” to value states of illness, involving lengthy and painful interviews. Work of Rosser et al. seems to be basis of most of the work on cost per QALY in the UK. Seem to have searched for a Reflective equilibrium. That is, decision-theoretic implications were confronted with direct intuitive choices (in context of health policies concerning others) and in case of discrepancy, participants were asked if they wanted to revise some of their decisions. %} Rosser, Rachel M. & Paul Kind (1978) “A Scale of Valuation of States of Illness: Is there a Social Consensus?,” International Journal of Epidemiology 7, 347–358. {% %} Rossner, Philipp & Lutz Kaufmann (2010) “Attainment Discrepancy Effects in Cumulative Prospect Theory,” working paper. {% In a Savagean setup, preference foundation for maximization of the quantile of the probability distribution. So, of the VaR. §6.1 may at first seem to suggest that quantiles are not that, but it does not, and instead it argues that VaR are often not used as a final-decision criterion. Quantile maximization is mathematically the same as VaR. %} Rostek, Marzena J. (2010) “Quantile Maximization in Decision Theory,” Review of Economic Studies 77, 339–371. {% Seems to be a classic on Möbius inverse. %} Rota, Gian-Carlo (1964) “On the Foundations of Combinatorial Theory I. Theory of Möbius Functions,” Zeitschrift für Warscheinlichkeitstheorie und Verwandte Gebiete 2, 340–368. {% Nice example of neurobiologist who criticizes psychologists by saying that there is not one fixed collection of mental processes, but that it depends on biological and chemical processes. Nice analogy of psychologists’ criticisms of economists. %} Roth, Alvin E. (1996) “Comment.” In Kenneth J. Arrow, Enrico Colombatto, Mark Perlman, & Christian Schmidt (eds.) The Rational Foundations of Economic Behavior: Proceedings of the IEA Conference Held in Turin, Italy, 198–202, St. Martins Press, New York. {% Empirical tests of bargaining solutions; Christiane, Veronika & I: binary lottery technique: pay not in money but in probability for gaining a prize. Thus, they have have linearity in outcome under EU (P.s.: this was proposed before by Smith (1961) and by Anscombe & Aumann (1963), and independently after by Allen (1987) and Berg, Daley, Dickhaut, & O’Brien (1986). %} Roth, Alvin E. & Michael W. Malouf (1979) “Game-Theoretic Models and the Role of Information in Bargaining,” Psychological Review 86, 574–594. {% discounting normative: object to discounting of life savings; argue that uncertainty cannot be used to justify discounting because it should be modeled as uncertainty. And that discounting of money does not necessarily imply discounting of life years. %} Roth, Carl A., Roy T. Ing, & David A. Ross (1978) letter to New England Journal of Medicine 2998, 1088. {% discounting normative: refers to Lottini da Volterra in the sixteenth century who argued against discounting “overestimation of a present on moral grounds”. %} Rothbard, Murray N. (1990) “Time Preference.” In John Eatwell, Murray Milgate, & Peter K. Newman (eds.) The New Palgrave: A Dictionary of Economic Theory and Doctrine, Vol. 4, 644–646, The MacMillan Press, London. {% %} Rothbart, Myron & Mark Snyder. (1970) “Confidence in the Prediction and Postdiction of an Uncertain Outcome,” Canadian Journal of Behavioral Science 2, 38–43. {% %} Rothblum, Uriel G. (1975) “Multivariate Constant Risk Posture,” Journal of Economic Theory 10, 309–322. {% Introduce second-order stochastic dominance (together with Hadar & Russell, 1969). P. 226 point 4 explains that being more risky is not identical to having more variance. %} Rothschild, Michael & Joseph E. Stiglitz (1970) “Increasing Risk: I. A Definition,” Journal of Economic Theory 2, 225–243. {% %} Rothschild, Michael & Joseph E. Stiglitz (1971) “Increasing Risk: II Its Economic Consequences,” Journal of Economic Theory 3, 66–84. {% %} Rothschild, Michael & Joseph E. Stiglitz (1973) “Some Further Results on the Measurement of Income Inequality,” Journal of Economic Theory 6, 188–204. {% Z&Z: shows that adverse selection can be detrimental for competitive markets; there will be competition with cream skimming. %} Rothschild, Michael & Joseph E. Stiglitz (1976) “Equilibrium in Competitive Markets,” Quarterly Journal of Economics 90, 629–649. {% Discussion of referee procedures; references to other nonmedical areas; was referaat at LUMC %} Rothwell, Peter M. & Christopher N. Martyn (2000) “Reproducibility of Peer Review in Clinical Neuroscience. Is Agreement between Reviewers Any Greater than Would Be Expected by Chance Alone?,” Brain 123, 1964–1969. {% On support theory; find that position-neutrality (focal hypothesis or alternative hyp.) affects support, but context-dependence not, exactly opposite to what I would expect a priori. It casts doubt on binary complementarity. %} Rottenstreich, Yuval & Lyle A. Brenner (1996) “Likelihood Judgment as Asymmetric Evaluation of Evidence,” Caltech, not to be cited. {% Utility of gambling: a low-affect outcome was preferred to a high-affect outcome if received with certainty, but not if received with low probability. Probability weighting more curved for more affective outcomes (inverse-S (= likelihood insensitivity) related to emotions) %} Rottenstreich, Yuval & Christopher K. Hsee (2001) “Money, Kisses, and Electric Shocks: On the Affective Psychology of Risk,” Psychological Science 12, 185–190. {% They give up explicit additivity of original support theory, replacing it by the weaker explicit subadditivity. %} Rottenstreich, Yuval & Amos Tversky (1997) “Unpacking, Repacking, and Anchoring: Advances in Support Theory,” Psychological Review 104, 406–415. {% Propose a variation of Gul’s disappointment aversion model where not all outcomes below the CE (certainty equivalent) are overweighted with weight , but only those below CE, where is a subjective parameter to choose. Obviously this model is only for positive outcomes, with the level 0 very empirically meaningful. Remarkably, this model is one of the few that is not rank-dependent when restricted to binary prospects because the minimum outcome of a prospect may exceed CE for < 1 and then it is not overweighted. It does have the multiplicative representation as usual for single nonzero outcome prospects. A preference foundation is, unfortunately, not in the paper (it is in a technical web appendix, but I prefer not to read such). As they point out on p. 1308, this model is a betweenness model. If we fix CE, then simply all utility differences below CE are indeed increased, and then it is EU. Betweenness means EU within each indifference class. The authors intuitively justify their model by the desirability to overweigh low outcomes, where low is relative to the prospect (they argue in favor of this aspect p. 1307 last para). Rank dependence also does that. They refer repeatedly to the value-at-risk model for motivation (p. 1307, p. 1329), but this is a rank dependent model (my prospect theory book shows this in Exercise 6.4.4, p. 181). They also justify their model by having countercyclical risk aversion (p. 1317 l.-2 and p. 1329 opening sentence in Conclusion. biseparable utility violated %} Routledge, Bryan R. & Stanley E. Zin (2010) “Generalized Disappointment Aversion and Asset Prices,” The Journal of Finance 64, 1303–1332. {% Continue on Popper’s struggle with probabilities to model evidence. %} Rowbottom, Darrell P. (2013) “Popper’s Measure of Corroboration and P(H|B),” British Journal for the Philosophy of Science 64, 739–745. {% %} Roy, Andrew D. (1952) “Safety First and the Holding of Assets,” Econometrica 20, 431–449. {% On October 2, 2012, the Royal Statistical Society of the UK asked 97 members of parliament the following question: ”If you spin a coin twice, what is the probability of getting two heads?” Only 40% gave the correct answer of 1/4, and the modal answer was 0.5. %} Royal Statistical Society (2012) {% foundations of statistics; nice on likelihood principle %} Royall, Richard (1968) “An Old Approach to Finite Population Sampling,” Journal of the American Statistical Association 63, 1269–1279. {% foundations of statistics; argues for likelihood principle; Reviewed by Thomas (2000) %} Royall, Richard (1997) “Statistical Evidence: A Likelihood Paradigm.” Chapman & Hall, New York. {% P. 113 seems to give Hölders inequality Problem 2.42 describes “Cantor ternary function” as continous and strictly increasing, problem 5.9 says the function is not absolutely continuous. Theorem 11.29 gives Riesz representation theorem. %} Royden, Halsey L. (1963) “Real Analysis.” MacMillan, New York (2nd edn., 1988). {% Utility of gambling %} Royden, Halsey L., Patrick Suppes, & Karol Walsh (1959) “A Model for the Experimental Measurement of the Utility of Gambling,” Behavioral Science 4, 11–18. {% Do as Fox & Tversky and Chow & Sarin, ambiguous versus unambiguous, both in joint and in separate evaluation, but measure affective reactions rather than WTP. Confirm the findings of the previous two studies. In experiment 2 they do the same but all with unambiguous prospects. In the separate treatment, subjects do not have better affects for a preferable prospect %} Rubaltelli, Enrico, Rino Rumiati, & Paul Slovic (2010) “Do Ambiguity Avoidance and the Comparative Ignorance Hypothesis Depend on People’s Affective Reactions?,” Journal of Risk and Uncertainty 40, 243–254. {% P. 1051, l.s 6/7: verbal statement of sure-thing principle/independence? Seems to have done something Anscombe-Aumann-like, seems state-dependent-achtig; that is, according to Arrow, Econometrica 1951 P. 1051, l.s 6/7: verbal statement of sure-thing principle/independence? %} Rubin, Herman (1949) “Postulates for the Existence of Measurable Utility and Psychological Probability (abstract 493)” Bulletin of the American Mathematical Society 55, 1050–1051. {% Axiom IV is preference version of independence, for all mixture weights. Rubin gives dynamic interpretation: “that it is immaterial in which order choice or random event occur, provided that a decision can be made before the random event occurs which corresponds to an arbitrary decision made afterwards.” This is dynamic consistency/time consistency! %} Rubin, Herman (1949) “The Existence of Measurable Utility and Psychological Probability,” Cowles Commission Discussion paper: Statistics: No. 332. Unpublished; undated but probably 1949. Abstract (entitled “Postulates for the existence of measurable utility and psychological probability”) appeared in the Bulletin of the American Mathematical Society 55, 1949, pp. 1050–1051. {% First with independence? With infinitely many prizes; The following reference is given this way by Marschak (1950) %} Rubin, Herman (undated, before 1951) “An Axiomatic System for Measurable Utility.” {% This was in 1983 Technical Report 83-27 of Purdue University. %} Rubin, Herman (1987) “A Weak System of Axioms for “Rational” Behavior and the Nonseparability of Utility from Prior,” Statistics and Decision 5, 47–58. {% %} Rubin, Rose M. & Cyril F. Chang (2003) “A Bibliometric Analysis of Health Economics Articles in the Economics Literature: 1991-2000,” Health Economics 12, 403–414. {% %} Rubinstein, Ariel (1979) “Equilibrium in Supergames with the Overtaking Criterion,” Journal of Economic Theory 21, 1–9. {% %} Rubinstein, Ariel (1980) “Ranking the Participants in a Tournament,” SIAM Journal on Applied Mathematics 38, 108–111. {% measure of similarity; Model: in choice between (p,x) and (q,y), participants consider probabilities or utilities identical if they are sufficiently similar, and then go by “nonidentical” dimension only. Otherwise they do something else. This is very similar to threshold models. This paper considers single-nonzero outcome lotteries. It shows that similarity relations on p and x, compatible with ratios of functions g and u, respectively, can be combined with the preference relation defined from g(p)u(x). It also shows that a preference relation representable by functions g, u through g(p)u(x), can be combined with similarity relations defined from g and u. These theorems are not really representation theorems because they don’t start from (similarity relations +) preference relations, but from only one of these two, and derive the other not from observed preferences but from the functions elicited from the one. %} Rubinstein, Ariel (1988) “Similarity and Decision-Making under Risk (Is there a Utility Resolution to the Allais Paradox?),” Journal of Economic Theory 46, 145–153. {% Argues what I heard Shapley once say in dinner in Nijmegen at the end of a game theory day in the early 1980s; i.e., good game theory should incorporate communication etc.) Download 7.23 Mb. Share with your friends:
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