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  • Open Daily: 10am - 10pm
    Alley-side Pickup: 10am - 7pm

    3038 Hennepin Ave Minneapolis, MN
    612-822-4611

Open Daily: 10am - 10pm | Alley-side Pickup: 10am - 7pm
3038 Hennepin Ave Minneapolis, MN
612-822-4611
Affective Decision Making Under Uncertainty: Risk, Ambiguity and Black Swans

Affective Decision Making Under Uncertainty: Risk, Ambiguity and Black Swans

Brown, Donald J.

Paperback

Series: Lecture Notes in Economic and Mathematical Systems, Book 691

Business GeneralEconomicsGeneral Mathematics

ISBN10: 3030595110
ISBN13: 9783030595111
Publisher: Springer Nature
Published: Dec 19 2020
Pages: 81
Weight: 0.32
Height: 0.20 Width: 6.14 Depth: 9.21
Language: English

This book is an exploration of the ubiquity of ambiguity in decision-making under uncertainty. It presents various essays on behavioral economics and behavioral finance that draw on the theory of Black Swans (Taleb 2010), which argues for a distinction between unprecedented events in our past and unpredictable events in our future. The defining property of Black Swan random events is that they are unpredictable, i.e., highly unlikely random events. In this text, Mandelbrot's (1972) operational definition of risky random unpredictable events is extended to Black Swan assets - assets for which the cumulative probability distribution or conditional probability distribution of random future asset returns is a power distribution. Ambiguous assets are assets for which the uncertainties of future returns are not risks. Consequently, there are two disjoint classes of Black Swan assets: Risky Black Swan assets and Ambiguous Black Swan assets, a new class of ambiguous assets withunpredictable random future outcomes.

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