Document Type
Article
Publication Date
2017
Abstract
A model of decision making is introduced that provides a unified approach for predicting choices under risk and over time. The model predicts systematic departures from expected utility and discounted utility using the same mathematical structure and the same psychological intuition and shows that a dozen diverse choice anomalies can be given a common underlying explanation. The model weights attribute differences both by their importance (consistent with expected utility and discounted utility) and by their salience or similarity (consistent with procedural models based on heuristics), and so provides a bridge between rational and heuristic representations of decision making.
Recommended Citation
Leland, J., & Schneider, M. (2017). Risk preference, time preference, and salience perception. ESI Working Papers 17-16. Retrieved from http://digitalcommons.chapman.edu/esi_working_papers/228/
Comments
Working Paper 17-16