Decisions under risk with incomplete knowledge

Deals with problems of decision-making among gambles in the case of non-numerous repetition of decisions and supposing that either it is impossible to identify the decision-maker's utility functions or an attempt is made to try hard to eliminate subjectivity from the decisions and therefore not to use these functions. On these assumptions, the expected utility theory is applicable, while the applicability of the expected value criterion is to a great extent questionable. A criterion is needed which would be able to incorporate objectively justified risk-aversion or risk-proneness into decisions in a consistent, systematic way without using utility functions. Such a criterion is presented. In this criterion the degree of objectively justified risk-aversion or risk-proneness is expressed by the same constant B. The interpretation of the constant B depends on the risk-attitude of the decision-maker. The proposed criterion reduces the problem of the choice between gambles with several non-zero outcomes to a problem of the choice between gambles with a single non-zero outcome.<>