Theory and Decision

ISSNs: 0040-5833, 1573-7187

14 found

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  1.  3
    Social evaluation functionals with an arbitrary set of alternatives.Juan C. Candeal - 2023 - Theory and Decision 95 (2):255-271.
    This paper explores the concept of a social evaluation functional in the case of an arbitrary set of alternatives. In the first part, a characterization of projective social evaluations functionals is shown whenever the common restricted domain is the set of all bounded utility functions equipped with the supremum norm topology. The result makes a crucial use, among others, of a continuity axiom. In the second part, a comparison meaningful property is introduced for a social evaluation functional which allows us (...)
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  2.  3
    On the possibility of Paretian liberalism: a comment.Wulf Gaertner - 2023 - Theory and Decision 95 (2):361-363.
    In 1981, the property of self-supporting preferences was shown to be a sufficient condition to circumvent Sen’s famous impossibility result on Paretian liberalism. A similar condition was proposed by Dougherty and Edward in a very recent issue of this journal. The present comment sheds light on the logical connection between these two findings.
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  3.  1
    Games with possibly naive present-biased players.Marco A. Haan & Dominic Hauck - 2023 - Theory and Decision 95 (2):173-203.
    We propose a solution concept for games that are played among players with present-biased preferences that are possibly naive about their own, or about their opponent’s future time inconsistency. Our perception-perfect outcome essentially requires each player to take an action consistent with the subgame perfect equilibrium, given her perceptions concerning future types, and under the assumption that other present and future players have the same perceptions. Applications include a common pool problem and Rubinstein bargaining. When players are naive about their (...)
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  4.  3
    Possibilistic beliefs in strategic games.Jaeok Park & Doo Hyung Yun - 2023 - Theory and Decision 95 (2):205-228.
    We introduce possibilistic beliefs into strategic games, describing a player’s belief about his opponents’ strategies as the set of their strategies he regards as possible. We formulate possibilistic strategic games where each player has preferences over his own strategies conditional on his possibilistic belief about his opponents’ strategies. We define several solution concepts for possibilistic strategic games such as (strict) equilibria, rationalizable sets, iterated elimination of never-best responses, and iterated elimination of strictly dominated strategies, and we study their properties and (...)
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  5.  3
    On the predictions of cumulative prospect theory for third and fourth order risk preferences.Ivan Paya, David A. Peel & Konstantinos Georgalos - 2023 - Theory and Decision 95 (2):337-359.
    In this paper, we analyse higher-order risky choices by the representative cumulative prospect theory (CPT) decision maker from three alternative reference points. These are the status quo, average payout and maxmin. The choice tasks we consider in our analysis include binary risks, and are the ones employed in the experimental literature on higher order risk preferences. We demonstrate that the choices made by the representative subject depend on the reference point. If the reference point is the status quo and the (...)
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  6.  5
    Care and anger motives in social dilemmas.Patrick Ring, Christoph A. Schütt & Dennis J. Snower - 2023 - Theory and Decision 95 (2):273-308.
    This paper provides evidence for the following novel insights: (1) People’s economic decisions depend on their psychological motives, which are shaped predictably by the social context. (2) In particular, the social context influences people’s other-regarding preferences, their beliefs and their perceptions. (3) The influence of the social context on psychological motives can be measured experimentally by priming two antagonistic motives—care and anger—in one player towards another by means of an observance or a violation of a fairness norm. Using a mediation (...)
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  7.  4
    Bargaining for assembly.Soumendu Sarkar & Dhritiman Gupta - 2023 - Theory and Decision 95 (2):229-254.
    We study a multilateral bargaining problem, where the buyer intends to purchase a subset of available items, each owned by a seller. The subset purchased must satisfy a notion of contiguity, which is modeled using graphs. The graph theoretic approach allows us to study different degrees of complementarity and substitutability between items. It also allows us to examine how degrees of complementarity and substitutability affect the share of surplus obtained by the buyer in the equilibrium of the bargaining game. We (...)
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  8.  3
    Rationalizable behavior in the Hotelling–Downs model of spatial competition.Joep van Sloun - 2023 - Theory and Decision 95 (2):309-335.
    We consider two scenarios of the Hotelling–Downs model of spatial competition. This setting has typically been explored using pure Nash equilibrium, but this paper uses point rationalizability (Bernheim, Econometrica J Economet Soc 52(4):1007–1028, 1984) instead. Pure Nash equilibrium imposes a correct beliefs assumption, which may rule out perfectly reasonable choices in a game. Point rationalizability does not have this correct beliefs assumption, which makes this solution concept more natural and permissive. The first scenario is the original Hotelling–Downs model with an (...)
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  9.  1
    Asymmetric guessing games.Zafer Akin - 2023 - Theory and Decision 94 (4):637-676.
    This paper theoretically and experimentally investigates the behavior of asymmetric players in guessing games. The asymmetry is created by introducing r>1\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$r>1$$\end{document} replicas of one of the players. Two-player and restricted N-player cases are examined in detail. Based on the model parameters, the equilibrium is either unique in which all players choose zero or mixed in which the weak player (r=1\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$r=1$$\end{document}) imitates the strong (...)
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  10.  7
    On stability of economic networks.Hamid Beladi, Xiao Luo, Reza Oladi & Nicholas S. P. Tay - 2023 - Theory and Decision 94 (4):677-691.
    In the spirit of Von Neumann and Morgenstern (Theory of games and economic behavior, Princeton University Press, Princeton, 1944), we introduce a notion of network stability. We study the structure of stable economic networks and their associated stable payoff allocations by analyzing the conditions under which complete networks and star networks (both with desirable property of inclusiveness) are stable. We also address conditions for existence and uniqueness of stable set of networks.
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  11.  4
    Prospect theory in multiple price list experiments: further insights on behaviour in the loss domain.Géraldine Bocquého, Julien Jacob & Marielle Brunette - 2023 - Theory and Decision 94 (4):593-636.
    In the theoretical description of prospect theory, distinct sets of parameters can control the curvature of the value function and the shape of the probability weighting function. There is one for the gain domain and one for the loss domain. However, in most estimations, behaviour over losses is assumed to perfectly reflect behaviour over gains, through a unique set of parameters. We examine the consequences of relaxing this simplifying assumption in the context of Tanaka et al.’s (Am Econ Rev 100(1):557–571, (...)
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  12.  10
    Rationality applied: resolving the two envelopes problem.Christian Hugo Hoffmann - 2023 - Theory and Decision 94 (4):555-573.
    The Two Envelopes Problem is a beautiful and quite confusing problem in decision theory which is ca. 35 years old and has provoked at least 150 papers directly addressing the problem and displaying a surprising variety of different responses. This paper finds decisive progress in an approach of Priest and Restall in 2003, contends that the recent papers having appeared since did not really go beyond that paper, argues further that Priest’s and Restall’s solution is still not complete, and proposes (...)
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  13.  2
    Hold-up induced by demand for fairness: theory and experimental evidence.Raghabendra Pratap Kc, Dominique Olié Lauga & Vincent Mak - 2023 - Theory and Decision 94 (4):721-750.
    Research in recent years suggests that fairness concerns could mitigate hold-up problems. In this study, we report theoretical analysis and experimental evidence on an opposite possibility: that fairness concerns could also induce hold-up problems. In our setup, hold-up problems will not occur with purely self-interested agents, but theoretically could be induced by demand for distributional fairness among agents without sufficiently strong counteracting factors such as intention-based reciprocity. We observe a widespread occurrence of hold-up in our experiment. Relationship-specific investments occurred less (...)
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  14.  1
    A Misfit model: irrational deterrence and bounded rationality.Karl Sörenson - 2023 - Theory and Decision 94 (4):575-591.
    Contemporary theories of deterrence place a strong emphasis on coherency between model and theory. Schelling’s contention of irrational threats for successful deterrence abandons the rationality assumption to explain how a player can deter, thereby departing from the standard game theoretic solution concepts. It is a misfit model in relation to a deterrence theory and, therefore, excluded. The article defends and remodels Schelling’s intuition by employing the level-k model. It is shown that an unsophisticated player that randomizes over its strategies brings (...)
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