facing outcomes involving chance; nonetheless, does not mean we cannot continue to “this learn by studying and modeling them separately” (pp. 149-150). And as we learn, developing newer and more accurate models, it is important that we have a good sense of when extant models can be appropriately applied. This paper discusses an experiment intended to determine whether there are circumstances in which the use of the standard expected utility model need not imply a tradeoff of descriptive validity for facility. Specifically, the experiment examines shared decision-making as a potential situation better suited for the expected utility framework. Choices between prospects with uncertain outcomes do not always confront individuals alone. Frequently, such decisions fall on organizations of people, like households choosing between health insurance plans. Sometimes people have organized for the very purpose of collectively making such decisions, like investment companies. Consequently, the modeling of preferences over probabilistic outcomes should look beyond individual behavior to consider shared preferences, which could be free of the cognitive biases shown to obfuscate expected utility maximization in individuals. That is, a pair of individuals making probabilistic decisions as though they were a single agent may behave more like an expected utility maximizer than an actual single agent. Since most multi-agent frameworks focus on games, it is important to ascertain the relative descriptiveness of standard expected utility as it applies to collaborative groups. For this reason, the simple experiment discussed here compares two-person collaborative pairs and solo individuals in terms of revealed consistency with the expected utility hypothesis. The measurement of comparison is a famous test of expected utility
facing outcomes involving chance; nonetheless, “this does not mean we cannot continue to learn by studying and modeling them separately” (pp. 149-150). And as we learn, developing newer and more accurate models, it is important that we have a good sense of when extant models can be appropriately applied. This paper discusses an experiment intended to determine whether there are circumstances in which the use of the standard expected utility model need not imply a tradeoff of descriptive validity for facility. Specifically, the experiment examines shared decision-making as a potential situation better suited for the expected utility framework. Choices between prospects with uncertain outcomes do not always confront individuals alone. Frequently, such decisions fall on organizations of people, like households choosing between health insurance plans. Sometimes people have organized for the very purpose of collectively making such decisions, like investment companies. Consequently, the modeling of preferences over probabilistic outcomes should look beyond individual behavior to consider shared preferences, which could be free of the cognitive biases shown to obfuscate expected utility maximization in individuals. That is, a pair of individuals making probabilistic decisions as though they were a single agent may behave more like an expected utility maximizer than an actual single agent. Since most multi-agent frameworks focus on games, it is important to ascertain the relative descriptiveness of standard expected utility as it applies to collaborative groups. For this reason, the simple experiment discussed here compares two-person collaborative pairs and solo individuals in terms of revealed consistency with the expected utility hypothesis. The measurement of comparison is a famous test of expected utility
robert_cortes_honors_thesis_june_2013.docx