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This paper presents a theory of measurable multiattribute value functions. Measurable value functions are based on the concept of a “preference difference” between alternatives and provide an interval scale of measurement for preferences under certainty. We present conditions for additive, multiplicative, and more complex forms of the measurable multiattribute value function. This development provides a link between the additive value function and multiattribute utility theory.

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Prior studies have shown that individuals are averse to ambiguity in probability. Many decisions are, however, made in market settings where an individual's decision is influenced by decisions of others participating in the market. In this paper, we extend the previous research to evaluate the effect of ambiguity on individual decisions and the resulting market price in market settings. We therefore examine an important issue: whether ambiguity effects persist in the face of market incentives and feedback. Two different market organizations, the sealed bid auction and the double oral auction, were employed. The subjects in the experiments were graduate business students and bank executives. Our results show that the individual bids and market prices for lotteries with ambiguous probabilities are consistently lower than the corresponding bids and market prices for equivalent lotteries with well-defined probabilities. The aversion to ambiguity therefore does not vanish in market settings. Our results provide insights into what a manager can expect in bidding situations where the object of the sale (oil leases, mineral rights) involves ambiguity in probability due to, for example, lack of information or prior experience. The results may also be useful in understanding some phenomena in insurance and equity markets.decisions under uncertainty, experimental economics, ambiguity

An individual's preference for risky alternatives is influenced by the strength of preference he feels for the consequences and his attitude toward risk taking. Conventional measures of risk attitude confound these two factors. In this paper we formally separate these factors and explore how this separation might significantly enhance our understanding of decision making under risk. We introduce a new measure of risk attitude defined relative to strength of preference. This measure is based on comparing an individual's von Neumann-Morgenstern utility function to his strength of preference function. The properties of this measure of relative risk attitude are developed. The concept of relative risk attitude has several important implications. First, it provides a better description of an individual's attitude toward risk. Second, it provides a better way to combine preferences of various experts in the context of multicriteria decision making. Finally, it provides a better insight into the implications of some commonly employed preference aggregation rules in group decision making.utility/preference: theory

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A method is presented for ranking multiattributed alternatives using a weighted-additive evaluation function with partial information about the weighting (scaling) constants, the method is applied to evaluate materials for use in nuclear waste containment. The paper derives conditions to determine whether a pair of alternatives can be ranked given the partial information about weighting constants, and presents an algorithm that partially rank-orders the complete set of alternatives based on the pairwise ranking information.