Decision Makers Facing Uncertainty: Theory Versus Evidence

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Show simple item record GIORDANI, Paolo SCHLAG, Karl H. ZWART, Sanne 2011-04-19T12:47:47Z 2011-04-19T12:47:47Z 2010
dc.identifier.citation Journal of Economic Psychology, 2010, 31, 4, 659-675
dc.identifier.issn 0167-4870
dc.description Revised version of EUI MWP WP 2007/27
dc.description.abstract This paper aims at assessing cultural differences in uncertainty attitude across Europe. We select questions from the European Values Survey (EVS) capturing salient features of uncertain scenarios (safe versus uncertain, freedom of choice and reduction of uncertainty), and formalize these questions through simple decision-theoretic problems. We then consider three competing normative models of choice under uncertainty (subjective expected utility (SEU), maximin utility and minimax regret), and analyze how they behave when facing each decision problem. We obtain theoretical predictions and, using the EVS dataset, we test them via latent class analysis to estimate the distribution of these behaviors across EU15. We find a larger proportion of SEU maximizers (Bayesians) in northern countries than in southern countries. The opposite is true for maximin utility behavior. Only a few are consistent with minimax regret behavior. (C) 2010 Elsevier B.V. All rights reserved.
dc.language.iso en
dc.publisher Elsevier Science Bv
dc.subject Uncertainty
dc.subject Maximin
dc.subject Minimax regret
dc.subject Bayesianism
dc.subject Cross-cultural differences
dc.subject European Values Survey
dc.subject Latent class analysis
dc.title Decision Makers Facing Uncertainty: Theory Versus Evidence
dc.type Article
dc.identifier.doi 10.1016/j.joep.2010.04.004
dc.neeo.contributor GIORDANI|Paolo E.|aut|
dc.neeo.contributor SCHLAG|Karl H.|aut|
dc.neeo.contributor ZWART|Sanne|aut|
dc.identifier.volume 31
dc.identifier.startpage 659
dc.identifier.endpage 675
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dc.identifier.issue 4

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