Abstract
This paper presents an equivalence result between expected utility theory (EU) and a modified version of case-based decision theory (CBDT). To be precise, it shows that a model constructed in EU can be embedded in a CBDT model, and vice versa. CBDT, proposed and axiomatized by Gilboa and Schmeidler (1995, Case-based decision theory, Quarterly Journal of Economics 110, 605–639), is related to case-based reasoning in psychology and artificial intelligence and considered as a descriptive theory of human behavior. In CBDT a decision maker remembers situations similar to the current problem and uses them to help solve it. This idea stems from bounded rationality and is similar in spirit to the satisficing theory of March and Simon (1958, Organizations, Wiley, New York) in the sense that the decision maker tends to satisfice rather than optimize.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
