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Optimal Cognitive Processes for Lotteries

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  • Y. Alarie
  • G. Dionne

Abstract

The aim of the present paper is to propose a rational model of decision-making for lotteries. The key element of the theory is the use of cognitive processes. The maximization of the degree of confidence associated with each judgment involves different processes. Our contribution explains some major violations of the expected-utility theory for decisions on lotteries.
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Suggested Citation

  • Y. Alarie & G. Dionne, 2001. "Optimal Cognitive Processes for Lotteries," THEMA Working Papers 2001-07, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    • Handle: RePEc:ema:worpap:2001-07
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    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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