The History of Risky Decision Models
This lecture describes the current state of the art in modeling risk attitudes as the result of interactions between empirically oriented psychologists and theoretically oriented economists. At several stages in history, the next step forward could be made only by empirical inputs and intuitions from psychologists. At several other stages, the next step forward could be made only by theoretical inputs from economists with advanced technical skills. Modern views on the measurement of utility, beliefs, risk, and ambiguity attitudes could only arise from the merger of ideas from all the fields mentioned.