Awareness of unawareness: A theory of decision making in the face of ignorance

Karni, Edi; Vierø, Marie‐Louise

doi:10.1016/j.jet.2016.12.011

Cited by 66 publications

(52 citation statements)

References 42 publications

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“…Visual techniques are also used as aids in decision making including A3 reports, BIM and LPS. Another type is one that combines a mixture of both MCDM, visual or explanatory/rational techniques called the hybrid type [62,63] and lastly are the statistical aids such as Monte Carlo. Figure 6 captures the full spectrum of decision techniques employed in the review articles.…”

Section: Decision-making Techniques In Designmentioning

confidence: 99%

“…The other explanatory/rational decision support techniques such as DQI (1.6%), LPS (1.6%), BIM (2.6%) come with similar limitations. Other techniques including statistical such as interpretive structural modelling [63], Graph Theory [52], Spearman's correlation coefficient index [61], Monte Carlo analysis [66]; and Means-End Chain [67] and zero-one goal programming [5] among others account for 19.4%. MCDM techniques and some Hybrid techniques to address some of these limitations.…”

Section: Decision-making Techniques In Designmentioning

confidence: 99%

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A Utilitarian Decision—Making Approach for Front End Design—A Systematic Literature Review

2020

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The complexity of construction processes often means interaction between various stakeholders, activities and tasks in order to deliver the expected outcomes. The intensity and dynamics of front-end design (FED) mean decision techniques and methods are important in supporting projects benefits delivery more importantly those based on utility of decision making. This paper explores a new utilitarian decision-making approach based on a systematic literature review of FED decision making. It presents the state of the art in design decision making concepts and analysis of tools over the last 10 years (2009–2019). From a total of 111 peer-reviewed journal papers, fifteen decision-making techniques are identified as dominant in design decision making, broadly grouped in four major categories as explanatory/rational, Multi Criteria Decision Making techniques (MCDM), Hybrid and Visual methods. The review finds that the most applied of the MCDM is Quality Function Deployment (QFD); while among the rational/explanatory techniques is set-based design (SBD). While there is limited application of Multi Attribute Utility Theory (MAUT) in decision making, the paper finds that the robust consistency and structured approach better captures the intricate dynamics of FED; including modelling of the subjectivity, interdependences and uncertainty in design discourse.

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Section: Decision-making Techniques In Designmentioning

confidence: 99%

Section: Decision-making Techniques In Designmentioning

confidence: 99%

A Utilitarian Decision—Making Approach for Front End Design—A Systematic Literature Review

2020

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“…The latter version of awareness of unawareness has been implicitly used in the literature on incomplete contracting by Maskin and Tirole (1999) who assume that agents may not foresee physical contingencies but are able to foresee exactly the number of contingencies (see Ma and Schipper, 2015, for an extension to asymmetric information). Karni and Vierø (2015) study subjective expected utility under awareness of unawareness and changes thereof. Again, the assumption that risk preferences are invariant to changes of awareness is their key axiom for linking preferences before and after changes of awareness.…”

Section: Introductionmentioning

confidence: 99%

Does Exposure to Unawareness Affect Risk Preferences? A Preliminary Result

Schipper

2017

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. One fundamental assumption often made in the literature on unawareness is that risk preferences are invariant to changes of awareness. We study how exposure to unawareness aects choices under risk. Participants in our experiment choose repeatedly between varying sure outcomes and a lottery in 3 phases. All treatments are exactly identical in phase 1 and phase 3, but dier in phase 2. There are ve dierent treatments pertaining to the lottery faced in phase 2: The control treatment (i.e., a standard lottery), the treatment with awareness of unawareness of lottery outcomes but known number of outcomes, the treatment with awareness of unawareness of outcomes but with unknown number of outcomes, the treatment with unawareness of unawareness of some outcomes, and the treatment with an ambiguous lottery. We study both whether behavior diers in phase 3 across treatments (between subjects eect) and whether dierences of subjects' behavior between phases 1 and phase 3 diers across treatments (within subject eects). We observe no signi cant treatment eects. Abstract One fundamental assumption often made in the literature on unawareness is that risk preferences are invariant to changes of awareness. We study how exposure to unawareness affects choices under risk. Participants in our experiment choose repeatedly between varying sure outcomes and a lottery in 3 phases. All treatments are exactly identical in phase 1 and phase 3, but differ in phase 2. There are five different treatments pertaining to the lottery faced in phase 2: The control treatment (i.e., a standard lottery), the treatment with awareness of unawareness of lottery outcomes but known number of outcomes, the treatment with awareness of unawareness of outcomes but with unknown number of outcomes, the treatment with unawareness of unawareness of some outcomes, and the treatment with an ambiguous lottery. We study both whether behavior differs in phase 3 across treatments (between subjects effect) and whether differences of subjects' behavior between phases 1 and phase 3 differs across treatments (within subject effects). We observe no significant treatment effects. Terms of use: Documents in

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“…SeeGrant and Quiggin (2013),Karni andVierø (2013, 2017), andSchipper (2016). Intuitively, Ω * iσ * t *is the set of paths on which i can trade given his relaxed financial constraints and given that the economy is in node σ * t * .…”

mentioning

confidence: 99%

“…property if π * i w * i | ω * i t = π * i w * i and π i w i = {w * i ∈W * i |w * i ⊆w i } π * i w * i 14 The distinction between exogenous and endogenous relaxation of a constraint was suggested to us by a referee, to whom we are grateful.15 There is a growing literature on changes in awareness. SeeGrant and Quiggin (2013),Karni andVierø (2013, 2017), andSchipper (2016).…”

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confidence: 99%

Market Selection With Differential Financial Constraints

Guerdjikova

Quiggin

2019

ECTA

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We analyze financial markets in which agents face differential constraints on the set of assets in which they can trade. In particular, the assets available to each agent span a partition of the state space that can be strictly coarser than the partition spanned by the assets available in the market. We first show that the existence of differential constraints has an impact on prices and allocations as compared to a complete financial market with unconstrained agents.We consider the implications for survival, taking the work of Blume and Easley (2006) as a starting point. We show that whenever agents have identical correct beliefs and equal discount factors, and their partitions are nested, all agents survive. When agents have heterogeneous beliefs, differential constraints may allow agents with wrong beliefs to survive. Provided constraints are relevant (in a sense we define more precisely), the condition for an agent to survive is that his survival index is at least as large as that of the agents with finer partitions. We also study the impact of deregulation (an increase in the set of assets available to some agents). Unless the agent can adopt beliefs that are closer to the truth on the newly refined partition than those of less constrained agents, increasing his opportunities for trade might harm his chances for survival.To show that prices are uniformly bounded away from 0, we use an argument similar to Krebs (2004). On an optimal consumption path for any consumer i, we have to have q min (σ t ; w)u i c i (σ t ) ≥ β i s∈w u i c i (σ t ; s) π i (s)

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Awareness of unawareness: A theory of decision making in the face of ignorance

Cited by 66 publications

References 42 publications

A Utilitarian Decision—Making Approach for Front End Design—A Systematic Literature Review

A Utilitarian Decision—Making Approach for Front End Design—A Systematic Literature Review

Does Exposure to Unawareness Affect Risk Preferences? A Preliminary Result

Market Selection With Differential Financial Constraints

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