Abstract
We study the uncertain dichotomous choice model. In this model a set of decision makers is required to select one of two alternatives, say 'support' or 'reject' a certain proposal. Applications of this model are relevant to many areas, such as political science, economics, business and management. The purpose of this paper is to estimate and compare the probabilities that different decision rules may be optimal. We consider the expert rule, the majority rule and a few inbetween rules. The information on the decisional skills is incomplete, and these skills arise from an exponential distribution. It turns out that the probability that the expert rule is optimal far exceeds the probability that the majority rule is optimal, especially as the number of the decision makers becomes large.
Original language | English |
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Pages (from-to) | 19-36 |
Number of pages | 18 |
Journal | Theory and Decision |
Volume | 45 |
Issue number | 1 |
DOIs | |
State | Published - 1 Jan 1998 |
Keywords
- Decision rule
- Expert rule
- Logarithmic expertise
- Majority rule
- Optimal rule
- Partial information
ASJC Scopus subject areas
- General Decision Sciences
- Developmental and Educational Psychology
- Arts and Humanities (miscellaneous)
- Applied Psychology
- General Social Sciences
- General Economics, Econometrics and Finance
- Computer Science Applications