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Issue:Fuzzy-rational explanation of the Ellsberg paradox

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Title of paper: FUZZY-RATIONAL EXPLANATION OF THE ELLSBERG PARADOX
Author(s):
Kiril Tenekedjiev
Technical University – Varna, 1 Studentska Str., 9010 Varna, Bulgaria
kiril@dilogos.com
Published in: "Notes on Intuitionistic Fuzzy Sets", Volume 12 (2006) Number 2, pages 39-52
Download:  PDF (233  Kb, File info)
Abstract: The paper analyses the Ellsberg paradox from the point of view of fuzzy rational decision makers, who can only partially measure uncertainty in terms of interval probabilities. Alternatives are modeled as fuzzy-rational lotteries, and are brought down to classical risky lotteries using intuitionistic operators according to a preliminarily chosen decision criterion under strict uncertainty. The Hurwicz α expected utility criterion serves to prove that declared preferences in the Ellsberg paradox are consistent and reasonable, if the fuzzyrational decision maker is a moderate or extreme pessimist.
Keywords: Ellsberg paradox, ambiguity, fuzzy rationality, partially quantified uncertainty, interval probabilities, Hurwicz α expected utility
AMS Classification: 03E72
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