ambiguity aversion
The Moral Burden of Ambiguity Aversion
In their article, "Egalitarianism under Severe Uncertainty", Philosophy and Public Affairs, 46:3, 2018, Thomas Rowe and Alex Voorhoeve develop an original moral decision theory for cases under uncertainty, called "pluralist egalitarianism under uncertainty". In this paper, I firstly sketch their views and arguments. I then elaborate on their moral decision theory by discussing how it applies to choice scenarios in health ethics. Finally, I suggest a new two-stage Ellsberg thought experiment challenging the core of the principle of their theory. In such an experiment pluralist egalitarianism seems to suggest the wrong, morally and rationally speaking, course of action -- no matter whether I consider my thought experiment in a simultaneous or a sequential setting.
Representing Attitudes Towards Ambiguity in Managerial Decisions
Sozzo, Sandro, Gasparin, Marta
We provide here a general mathematical framework to model attitudes towards ambiguity which uses the formalism of quantum theory as a "purely mathematical formalism, detached from any physical interpretation". We show that the quantum-theoretic framework enables modelling of the "Ellsberg paradox", but it also successfully applies to more concrete human decision-making (DM) tests involving financial, managerial and medical decisions. In particular, we provide a faithful mathematical representation of various empirical studies which reveal that attitudes of managers towards uncertainty shift from "ambiguity seeking" to "ambiguity aversion", and viceversa, thus exhibiting "hope effects" and "fear effects" in management decisions. The present framework provides a new bold and promising direction towards the development of a unified theory of decisions in the presence of uncertainty.
Quantum Structures in Human Decision-making: Towards Quantum Expected Utility
Daniel Kahneman was awarded the Nobel Prize in Economic Science in 2002 for his pioneering studies on the identification and estimation of the psychological factors that influence human behaviour under uncertainty, which led to the birth of a new domain called behavioural economics. Cognitive psychologists have assumed for years, often implicitly, that complex cognitive processes, like human judgement and decision-making (DM), have to be modelled by combining set-theoretic structures and should obey to mathematical relations that resemble those typically used in logic, formalized by Boole (Boolean logic), and probability, axiomatized by Kolmogorov (Kolmogorovian probability) [1]. These structures are known in physics as classical structures: they were originally used in classical physics, and later extended to statistics, psychology, economics, finance and computer science. Classical structures are also implicitly assumed in the so-called Bayesian approach, according to which any source of uncertainty can be formalized probabilistically, while people update knowledge according to the Bayes law of Kolmogorovian probability. Finally, classical structures are the building blocks of subjective expected utility theory (SEUT), providing both the descriptive and the normative foundations of rational DM: in situations of uncertainty, people (should) choose as if they maximized EU with respect to a unique probability measure, satisfying the axioms of Kolmogorov and interpreted as their subjective probability [2, 3]. However, on the one side, empirical research in cognitive psychology has revealed that classical structures are not generally able to model human judgements and decisions, thus making problematical the 1 interpretation of a wide range of cognitive phenomena in terms of standard logic and probability theory. On the other side, Kahneman, Tversky and other authors suggested that these empirical deviations from classicality are "true errors" of human reasoning, whence the use of terms like "effect", "fallacy", "paradox", "contradiction", etc., to refer to such phenomena [4, 5].
An Ambiguity Aversion Model for Decision Making under Ambiguity
Ma, Wenjun (South China Normal University) | Luo, Xudong (Sun Yat-sen University) | Jiang, Yuncheng (South China Normal University)
In real life, decisions are often made under ambiguity, where it is difficult to estimate accurately the probability of each single possible consequence of a choice. However, this problem has not been solved well in existing work for the following two reasons. (i) Some of them cannot cover the Ellsberg paradox and the Machina Paradox. Thus, the choices that they predict could be inconsistent with empirical observations. (ii) Some of them rely on parameter tuning without offering explanations for the reasonability of setting such bounds of parameters. Thus, the prediction of such a model in new decision making problems is doubtful. To the end, this paper proposes a new decision making model based on D-S theory and the emotion of ambiguity aversion. Some insightful properties of our model and the validating on two famous paradoxes show that our model indeed is a better alternative for decision making under ambiguity.