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Exploring rationality of prospect choices among decision-makers in a population
KTH, School of Electrical Engineering and Computer Science (EECS), Intelligent systems, Decision and Control Systems (Automatic Control). Digital Futures, Stockholm Sweden.ORCID iD: 0000-0002-6367-6302
KTH, School of Architecture and the Built Environment (ABE), Sustainable development, Environmental science and Engineering, Resources, Energy and Infrastructure. Digital Futures, Stockholm Sweden.ORCID iD: 0000-0002-5665-747x
KTH, School of Electrical Engineering and Computer Science (EECS), Computer Science, Computational Science and Technology (CST). Digital Futures, Stockholm Sweden.ORCID iD: 0000-0001-6553-823X
Department of Psychology, Uppsala University, Uppsala Sweden.
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2024 (English)Conference paper, Published paper (Refereed)
Abstract [en]

The random utility model (RUM) is a fundamental notion in studies of human decision-making. However, RUM relies on the calibration of its choice function's weight parameter, usually interpreted as a rationality parameter, resulting in a case-dependence that undermines both interpretability and predictability of choices across experimental settings. We addressed this limitation by normalizing utilities in RUM and deriving a new choice parameter β, independent of case-specific prospects. Drawing from a novel interpretation of β in terms of the lowest perceived probability of unlikely events, we conducted an experimental survey in Swedish universities to infer β distributions, capturing the variability of probability perception among decision-makers. We tested these statistical models for β on two independent datasets exploring the framing effect. The results showed that the predictions align with the observed experimental data (Pearson's correlation greater than 94%), thereby indicating that the novel characterization of the choice parameter strengthens the predictive capabilities of RUM.

Place, publisher, year, edition, pages
Elsevier BV , 2024. Vol. 58, p. 133-138
Keywords [en]
choice parameter, decision-making, prospects, RUM, unlikely events probability
National Category
Other Natural Sciences
Identifiers
URN: urn:nbn:se:kth:diva-360565DOI: 10.1016/j.ifacol.2025.01.169ISI: 001403404200023Scopus ID: 2-s2.0-85218017523OAI: oai:DiVA.org:kth-360565DiVA, id: diva2:1940631
Conference
5th IFAC Workshop on Cyber-Physical Human Systems, CPHS 2024, Antalya, Türkiye, Dec 12 2024 - Dec 13 2024
Note

QC 20250228

Available from: 2025-02-26 Created: 2025-02-26 Last updated: 2025-04-01Bibliographically approved

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Fontan, AngelaCvetkovic, VladimirHerman, PawelJohansson, Karl H.

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  • apa
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