Correction of errors in Vetschera's (2004) model of behavioral uncertainty and investment

Abstract

Modelling of behavioural uncertainty has been a concern for researchers for some time. This paper briefly reviews modelling related to uncertainty and the focuses on the model presented by Vetschera (2004). A model of decision behaviour has been developed in the paper with regard to investment and cooperation taking into account the uncertainty and lack of information. The model is an important contribution for it focuses on situations that are not usual to the normal principle agent problems. The present review however reveals some errors in the paper. Sometimes errors may appear editorial but the same errors may lead the interested reader or researcher to inappropriate paths, particularly those who may fail to follow an argument or comprehend the underlying meanings of the equations and analytical solutions. In this manner, further work on this important topic may be hindered if researchers accept forms as presented in the paper literally as facts to further work. The main contribution of this paper is that it presents the correct forms of the mathematical aspects and procedures of the Vetschera (2004) paper.