The principle of choice often expressed as a continuity axiom recommends a single ordering of both riskless and risky prospects. An analytical device contributed by Pfanzagl is extended here to show that riskless versus risky monetary comparisons ought to be more nuanced, even from a perspective sympathetic to the usual axioms. Allais’ example illustrates a related point to oppose the usual the...

Recently proposed models of risky choice imply systematic violations of transitivity of preference. This study explored whether people show the predicted intransitivity of the two models proposed to account for the certainty effect in Allais paradoxes. In order to distinguish “true” violations from those produced by “error,” a model was fit in which each choice can have a different error rate a...

The Allais Paradox seems as fresh today as it was when first posed some 40 years ago. It has been discussed in the intervening decades and led to many suggestions for modifying, extending or abandoning standard subjective expected utility theory. It has also led to much discussion of the distinction between normative and descriptive models and their rôle in prescriptive decision support. It see...

This paper models choice under risk, whether such choices are over simple lotteries or over lotteries that arise from a portfolio of endogenously generated shares of assets. Our model satisfies various prudence and risk aversion conditions, is consistent with Allais paradox rankings, and generates various insurance-related results. Within a portfolio framework with compounded reinvestments, our...

Heparin is an injectable anticoagulant that prevents coagulation. There are presently high and low molecular heparins as well as synthetic pentasaccharide inhibitors. Given its ubiquitous use in sensitive medical states, there is a high concern for safety with this drug. Heparin can induce several distinct immune-mediated reactions. There are several options to consider when heparin allergy occ...