Theory and Decision

, Volume 34, Issue 1, pp 1–20

One-shot decisions under Linear Partial Information

  • Edward Kofler
  • Peter Zweifel
Article

DOI: 10.1007/BF01076102

Cite this article as:
Kofler, E. & Zweifel, P. Theor Decis (1993) 34: 1. doi:10.1007/BF01076102

Abstract

This paper purports to make a contribution to the analysis of a class of decisions that has received little attention in the literature, although it appears to be of considerable importance. Certain decisions cannot be repeated but must be made under fuzziness in the sense that state probabilities are not exactly known (LPI-fuzziness). The analysis of Linear Partial Information is applied to the principle of neglecting small probabilities found by Allais (1953), enabling the decision maker to break away from the maxmin criterion. By systematic exploitation of the fuzzy information available, strategies are shown to exist that provide payoffs whose lower bound exceeds the maxmin benchmark with sufficiently high probability. The same methodology is shown to be useful for dealing with the case of only ordinal preference orderings that are so typical of those crucial decisions that may be made only once in a lifetime.

Keywords

One-shot decisionlinear partial informationpreference ordering

Copyright information

© Kluwer Academic Publishers 1993

Authors and Affiliations

  • Edward Kofler
    • 1
  • Peter Zweifel
    • 1
  1. 1.Institute for Empirical Research in EconomicsUniversity of ZurichZurichSwitzerland