Judgments of Probability and Utility for Decision-Making
Annual rept. no. 1, 1 Oct 1970-30 Sep 1971
MICHIGAN UNIV ANN ARBOR ENGINEERING PSYCHOLOGY LAB
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The report describes research intended to develop procedures for eliciting judgments of probability and utility that could be employed efficiently in a decision theoretic analysis. Experiments on probability estimation investigated the reinforcing effects of a proper scoring rule upon probability estimates the use of Bayesian procedures to revise probability estimates and, the relative merits of probabilities and odds as response modes. Research on the decomposition of utility estimates showed that the model of a weighted linear average is relatively insensitive to nonadditive combination rules but highly sensitive to the nonlinearity of utility functions when utilities are estimated it makes relatively little difference whether or not the judgments are decomposed and, the procedures of decomposing utility estimates were feasible for use on a real world problem where water-quality engineers rather than college students served as subjects.
- Operations Research