Developing and Testing Theories of Decision Making

A special issue of Games (ISSN 2073-4336). This special issue belongs to the section "Behavioral and Experimental Game Theory".

Deadline for manuscript submissions: closed (15 May 2022) | Viewed by 12124

Special Issue Editor

School of Economics & Finance, University of St Andrews, St Andrews KY16 9AJ, UK
Interests: decision theory; economic theory; behavioral economics; experiments

Special Issue Information

Dear Colleagues,

The past twenty years have seen an explosion of interest in the study of individual non-strategic decision-making. This interest has led to the publication of many seminal papers that have improved our understanding of the testable implications of classic, as well as recently developed, models or rational or bounded-rational behavior in deterministic or stochastic choice environments under certainty, risk or uncertainty. This Special Issue aims to contribute further to this understanding and invites scholars to contribute with theoretical, methodological or experimental/empirical papers that will aim to advance the field further. The issue particularly welcomes papers that develop and/or test models of preference or choice; design and implement focused decision-making experiments with human subjects; or propose computational methods that are relevant to revealed preference analysis.

Dr. Georgios Gerasimou
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

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Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1600 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • riskless choice
  • choice under risk or uncertainty
  • bounded rationality
  • general choice models
  • consumer and asset demand models
  • stochastic choice models
  • reference-dependent preferences
  • menu-dependent preferences
  • incomplete or intransitive preferences
  • limited attention and salience
  • indecisiveness
  • revealed preference methods
  • experimental methods
  • computational methods
  • neuroeconomic methods

Published Papers (5 papers)

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Research

24 pages, 442 KiB  
Article
The Intermediate Value Theorem and Decision-Making in Psychology and Economics: An Expositional Consolidation
Games 2022, 13(4), 51; https://doi.org/10.3390/g13040051 - 15 Jul 2022
Cited by 2 | Viewed by 2064
Abstract
On taking the intermediate value theorem (IVT) and its converse as a point of departure, this paper connects the intermediate value property (IVP) to the continuity postulate typically assumed in mathematical economics, and to the solvability axiom typically assumed in mathematical psychology. This [...] Read more.
On taking the intermediate value theorem (IVT) and its converse as a point of departure, this paper connects the intermediate value property (IVP) to the continuity postulate typically assumed in mathematical economics, and to the solvability axiom typically assumed in mathematical psychology. This connection takes the form of four portmanteau theorems, two for functions and the other two for binary relations, that give a synthetic and novel overview of the subject. In supplementation, the paper also surveys the antecedent literature both on the IVT itself, as well as its applications in economic and decision theory. The work underscores how a humble theorem, when viewed in a broad historical frame, bears the weight of many far-reaching consequences; and testifies to a point of view that the apparently complicated can sometimes be under-girded by a most basic and simple execution. Full article
(This article belongs to the Special Issue Developing and Testing Theories of Decision Making)
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14 pages, 502 KiB  
Article
Correcting for Random Budgets in Revealed Preference Experiments
Games 2022, 13(2), 30; https://doi.org/10.3390/g13020030 - 11 Apr 2022
Viewed by 1955
Abstract
Experiments on revealed preference often use budget sets that are randomly and independently drawn according to some criteria for each participant. However, this means that the budget sets faced by different individuals are not the same. This paper proposes a method to control [...] Read more.
Experiments on revealed preference often use budget sets that are randomly and independently drawn according to some criteria for each participant. However, this means that the budget sets faced by different individuals are not the same. This paper proposes a method to control for these differences. In particular, we control for the “power” of different budget sets by examining the consistency of an individual’s choices relative to some simulated baseline behavior conditional on budgets faced by the individual. We apply this methodology to two existing experimental datasets. Our results show that failure to account for this variation results in a bias when looking directly at measures of choice consistency and the sign of this bias depends on the measure being used. However, controlling for this variation does not change the correlation between measures of choice consistency and observable demographic characteristics like income and education. Full article
(This article belongs to the Special Issue Developing and Testing Theories of Decision Making)
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10 pages, 276 KiB  
Article
Random Rank-Dependent Expected Utility
Games 2022, 13(1), 13; https://doi.org/10.3390/g13010013 - 20 Jan 2022
Cited by 1 | Viewed by 2741
Abstract
We present a novel characterization of random rank-dependent expected utility for finite datasets and finite prizes. As a byproduct, we obtain a characterization of random expected utility that works for finite datasets. The test lends itself to statistical testing. We apply our test [...] Read more.
We present a novel characterization of random rank-dependent expected utility for finite datasets and finite prizes. As a byproduct, we obtain a characterization of random expected utility that works for finite datasets. The test lends itself to statistical testing. We apply our test to an experimental dataset and find evidence against random expected utility, while random rank-dependent expected utility can explain the dataset. Full article
(This article belongs to the Special Issue Developing and Testing Theories of Decision Making)
21 pages, 476 KiB  
Article
On Rational Choice and the Representation of Decision Problems
Games 2021, 12(4), 86; https://doi.org/10.3390/g12040086 - 09 Nov 2021
Viewed by 2099
Abstract
In economic theory, an agent chooses from available alternatives—modeled as a set. In decisions in the field or in the lab, however, agents do not have access to the set of alternatives at once. Instead, alternatives are represented by the outside world [...] Read more.
In economic theory, an agent chooses from available alternatives—modeled as a set. In decisions in the field or in the lab, however, agents do not have access to the set of alternatives at once. Instead, alternatives are represented by the outside world in a structured way. Online search results are lists of items, wine menus are often lists of lists (grouped by type or country), and online shopping often involves filtering items which can be viewed as navigating a tree. Representations constrain how an agent can choose. At the same time, an agent can also leverage representations when choosing, simplifying their choice process. For instance, in the case of a list he or she can use the order in which alternatives are represented to make their choice. In this paper, we model representations and decision procedures operating on them. We show that choice procedures are related to classical choice functions by a canonical mapping. Using this mapping, we can ask whether properties of choice functions can be lifted onto the choice procedures which induce them. We focus on the obvious benchmark: rational choice. We fully characterize choice procedures which can be rationalized by a strict preference relation for general representations including lists, list of lists, trees and others. Our framework can thereby be used as the basis for new tests of rational behavior. Classical choice theory operates on very limited information, typically budgets or menus and final choices. This is in stark contrast to the vast amount of data that specifically web companies collect about their users’ choice process. Our framework offers a way to integrate such data into economic choice models. Full article
(This article belongs to the Special Issue Developing and Testing Theories of Decision Making)
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9 pages, 255 KiB  
Communication
A Note on Numerical Representations of Nested System of Strict Partial Orders
by
Games 2021, 12(3), 57; https://doi.org/10.3390/g12030057 - 07 Jul 2021
Viewed by 1901
Abstract
This note provides two numerical representations of a nested system of strict partial orders. The first representation is based on utility and threshold functions. We generalize the threshold representation of menu-dependent preferences by allowing the threshold to depend not only on the menu [...] Read more.
This note provides two numerical representations of a nested system of strict partial orders. The first representation is based on utility and threshold functions. We generalize the threshold representation of menu-dependent preferences by allowing the threshold to depend not only on the menu but also on the pair of alternatives under comparison. The threshold function can be interpreted as the distance between alternatives. The second representation is based on the aggregation of multi-dimensional preference. This representation describes a decision-making procedure where multiple criteria are gradually aggregated into an overall assessment. Full article
(This article belongs to the Special Issue Developing and Testing Theories of Decision Making)
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