Incremental evaluation of risky choices.
This paper compares the incremental method of valuation and its possible effects on choices analysed through utility theory with similar zero-base valuations. Analysis shows how biases can arise using incremental valuations in situations with decreasing risk aversion. This could be important in certain circumstances, e.g. delegated decision-making in cases where the total value of an organisation is unknown to the decision-maker or difficult to quantify.
D002755:Choice Behavior; D003657:Decision Making; D005069:Evaluation Studies as Topic; D009934:Organization and Administration; D011336:Probability; D012306:Risk