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HeuristicsThe Foundations of Adaptive Behavior$
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Gerd Gigerenzer, Ralph Hertwig, and Thorsten Pachur

Print publication date: 2011

Print ISBN-13: 9780199744282

Published to Oxford Scholarship Online: May 2011

DOI: 10.1093/acprof:oso/9780199744282.001.0001

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One-Reason Decision-Making: Modeling Violations of Expected Utility Theory

One-Reason Decision-Making: Modeling Violations of Expected Utility Theory

Chapter:
(p.186) Chapter 8 One-Reason Decision-Making: Modeling Violations of Expected Utility Theory
Source:
Heuristics
Author(s):

Konstantinos V. Katsikopoulos

Gerd Gigerenzer (Contributor Webpage)

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780199744282.003.0008

People violate expected utility theory and this has been traditionally modeled by augmenting its weight-and-add framework by nonlinear transformations of values and probabilities. Yet individuals often use one-reason decision-making when making court decisions or choosing cellular phones, and institutions do the same when creating rules for traffic safety or fair play in sports. This chapter analyzes a model of one-reason decision-making, the priority heuristic, and show that it simultaneously implies common consequence effects, common ratio effects, reflection effects, and the fourfold pattern of risk attitude. The preferences represented by the priority heuristic satisfy some standard axioms. This work may provide the basis for a new look at bounded rationality.

Keywords:   decision making, EVT/EUT, St. Petersburg Paradox, heuristics, priority

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