Abstract
This study explores small feedback-based decision problems experimentally. Conducted were the experiments in which the decision-makerââ"šÂ¬Ã¢"žÂ¢s payoff distribution was limited to either favorable distribution or unfavorable distribution. The first remarkable observation revealed complexity/loss aversion in the experiment. The second observation included the law of small numbers. Deviations from maximization were also observed. Finally, we investigated the imperfect Bayesian decision-makers observed in the experiment by exploring to what extent the decision-makers could update subjective Bayesian probability and rely on it in making decisions.
| Original language | English |
|---|---|
| Number of pages | 5 |
| Journal | American Journal of Applied Sciences |
| Publication status | Published - 2005 |
Keywords
- Bayesian statistical decision theory
- decision making
- experimental economics
- mathematical models
- statistical decision
- uncertainty