Publication Date



Technical Report: UTEP-CS-19-31

To appear in Journal of Uncertain Systems, 2020, Vol. 14.


According to a naive understanding of economic behavior, for each object, we should have an internal estimate of how much this object is worth for us. If anyone offers us to buy this object at a smaller amount, we should agree, and if anyone offers to buy it from us for a larger amount, we should agree as well. In practice, however, contrary to this understanding, the price for which we are willing to buy and the price at which we are willing to sell are often different. In this paper, we show that this seemingly counterintuitive phenomenon can be explained within decision theory -- if we use the standard Hurwicz optimism-pessimism recommendations for decision making under uncertainty.