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On Solving Some Paradoxes Using the Ordered Weighted Averaging Operator Based Decision Model
Author(s) -
Xiong Wei,
Liu Hailin
Publication year - 2014
Publication title -
international journal of intelligent systems
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.291
H-Index - 87
eISSN - 1098-111X
pISSN - 0884-8173
DOI - 10.1002/int.21621
Subject(s) - operator (biology) , preference , subjective expected utility , mathematical economics , expected utility hypothesis , von neumann–morgenstern utility theorem , decision theory , mathematics , value (mathematics) , computer science , statistics , biochemistry , chemistry , repressor , transcription factor , gene
In real life, people often need to make decisions in face of uncertainty. The traditional approach to rational decision making under uncertainty is the theory of expected utility. However, the Ellsberg paradox shows that the preference pattern exhibited by ordinary people often violates the expected utility theory. Similar to the Ellsberg paradox, Machina proposes two additional paradoxes, which challenge various important nonexpected utility models developed in the literature. This paper attempts to provide a unified treatment of all these paradoxes by extending the ordered weighted averaging operator based decision model to allow the degree of optimism to take multiple values instead of a single value.