Journal
JOURNAL OF RISK AND UNCERTAINTY
Volume 57, Issue 3, Pages 199-223Publisher
SPRINGER
DOI: 10.1007/s11166-018-9293-3
Keywords
Expected utility; Bounded rationality; Deliberation; Probabilistic choice; Confidence; Response times
Categories
Funding
- UK Economic and Social Research Council [RES-051-27-0248, ES/K002201/1]
- Leverhulme Trust [RP2012-V-022]
- Australian Research Council [DP1095681]
- ESRC [ES/K002201/1] Funding Source: UKRI
- Australian Research Council [DP1095681] Funding Source: Australian Research Council
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We build a satisficing model of choice under risk which embeds Expected Utility Theory (EUT) into a boundedly rational deliberation process. The decision maker accumulates evidence for and against alternative options by repeatedly sampling from her underlying set of EU preferences until the evidence favouring one option satisfies her desired level of confidence. Despite its EUT core, the model produces patterns of behaviour that violate standard EUT axioms, while at the same time capturing systematic relationships between choice probabilities, response times and confidence judgments, which are beyond the scope of theories that do not take deliberation into account.
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