Classic analysis of the subject and the development of personal probability; one of the greatest controversies in modern statistcal thought.

We develop a framework for modeling choice in the presence of framing effects. An extended choice function assigns a chosen element to every pair (A, f ) where A is a set of alternatives and f is a frame. A frame includes observable information that is irrelevant in the rational assessment of the alternatives, but nonetheless affects choice. We relate the new framework to the classical model of choice correspondence. Conditions are identified under which there exists either a transitive or (...) a transitive and complete binary relation R such that an alternative x is chosen in some (A, f ) iff x is R-maximal in the set A. We then demonstrate that the framework of choice correspondence misses information, which is essential to economic modeling and which is incorporated in the extended choice function. (shrink)

A behavioral dataset contains various preference orderings displayed by the same individual in different payoff-irrelevant circumstances. We introduce a framework for eliciting the individual’s underlying preferences in such cases, in which it is conjectured that the variation in the observed preference orderings is the outcome of some cognitive process that distorts the underlying preferences. We then demonstrate for two cognitive processes how to elicit the individual’s underlying preferences from behavioral datasets.

The standard economic choice model assumes that the decision maker chooses from sets of alternatives. In contrast, we analyze a choice model in which the decision maker encounters the alternatives in the form of a list. We present two axioms similar in nature to the classical axioms of choice from sets. We show that they characterize all the choice functions from lists that involve the choice of either the first or the last optimal alternative in the list according to some (...) preference relation. We then relate choice functions from lists to the classical notions of choice correspondences and random choice functions. (shrink)