Anxiety and Decision Making with Delayed Resolution of Uncertainty

Theory and Decision 46 (2):159-199 (1999)
In many real-world gambles, a non-trivial amount of time passes before the uncertainty is resolved but after a choice is made. An individual may have a preference between gambles with identical probability distributions over final outcomes if they differ in the timing of resolution of uncertainty. In this domain, utility consists not only of the consumption of outcomes, but also the psychological utility induced by an unresolved gamble. We term this utility anxiety. Since a reflective decision maker may want to include anxiety explicitly in analysis of unresolved lotteries, a multiple-outcome model for evaluating lotteries with delayed resolution of uncertainty is developed. The result is a rank-dependent utility representation (e.g., Quiggin, 1982), in which period weighting functions are related iteratively. Substitution rules are proposed for evaluating compound temporal lotteries. The representation is appealing for a number of reasons. First, probability weights can be interpreted as the cognitive attention allocated to certain outcomes. Second, the model disaggregates strength of preference from temporal risk aversion and thus provides some insight into the old debate about the relationship between von Neumann–Morgenstern utility functions and strength of preference value functions
Keywords Decision analysis  Risk theory  Delayed resolution of uncertainty  Rank-dependent utility  Stochastic stationarity
Categories (categorize this paper)
DOI 10.1023/A:1004990410083
 Save to my reading list
Follow the author(s)
My bibliography
Export citation
Find it on Scholar
Edit this record
Mark as duplicate
Revision history Request removal from index
Download options
PhilPapers Archive

Upload a copy of this paper     Check publisher's policy on self-archival     Papers currently archived: 23,664
External links
Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
Through your library
References found in this work BETA

No references found.

Add more references

Citations of this work BETA

Add more citations

Similar books and articles
Sven Ove Hansson (2006). Uncertainty and the Ethics of Clinical Trials. Theoretical Medicine and Bioethics 27 (2):149-167.

Monthly downloads

Added to index


Total downloads

52 ( #92,740 of 1,903,038 )

Recent downloads (6 months)

23 ( #22,969 of 1,903,038 )

How can I increase my downloads?

My notes
Sign in to use this feature

Start a new thread
There  are no threads in this forum
Nothing in this forum yet.