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A behavioral decision theory paradox
Author(s) -
Bierman Harold
Publication year - 1989
Publication title -
behavioral science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.371
H-Index - 45
eISSN - 1099-1743
pISSN - 0005-7940
DOI - 10.1002/bs.3830340405
Subject(s) - regret , prospect theory , decision maker , preference , decision theory , mathematical economics , dominance (genetics) , causal decision theory , economics , expected utility hypothesis , positive economics , decision analysis , psychology , microeconomics , computer science , management science , evidential reasoning approach , business decision mapping , machine learning , biochemistry , chemistry , gene
This paper deals with a paradox. Tversky and Kahneman have presented the distinction between transparent and nontransparent dominance. Thaler has expanded their concept to present a paradox of choice where one prefers an alternative that is subsequently proved to be inferior (but the decision maker may still prefer the inferior alternative). Regret theory is used to explain both the paradox and one type of preference reversal.