ON THE CONCEPT OF IMMEDIATE PROBABILITIES

The problem of decision making under doubt is described. The concept o f immediate probabilities is introduced. It is seen as a modification of typical probabilistic knowledge with information about the payoffs, mediated through dispositional information (optimism/pessimism), resu lting in a modified formulation of an agents perception of the probabi lities in effect in the current decision. We use the Dempster rule of combination to help obtain an expression for these probabilities. We s how how immediate probabilities allows us to explain the Allais parado x. A number of properties of these probabilities are described. The st rategic use of these probabilities are explored as a means for effecti ng other people's decisions. (C) 1995 John Wiley and Sons, Inc.