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The influence of risk fuzziness on strategies of drawing up contracts

Piech H., Ptak A., Machura M.

Prace Naukowe Instytutu Matematyki i Informatyki Politechniki Częstochowskiej

2005

Vol. 4, nr 1

211-219

A contract usually consists in weighing risk and motivation [21]. Most contracts are constructed in such a way that both players share of risk. Only one party taking the risk reduces the motivation of the players. When making decisions the players have a range of knowledge on the acts of "Nature", i.e. they are aware that a random factor can influence their payments. One uses, as a rule, the usefulness function in contracts. It is also possible to use functions determining the connection between sums of money and usefulness (e.g. v(x) is the usefulness of receiving the x currency units). One includes the risk concept in considerations in the form of so-called reluctance to risk. If somebody is reluctant to risk this means that he prefers to receive a definite sum of money than to hope for the best which can give either a bigger or a smaller payment. In the present considerations [24], random parameters as well as estimated and non-measurable parameters are subjected to fuzziness. The influence of fuzzy information and any forms of uncertain knowledge is extremely essential in the strategic games and to a high degree decides on the final results of the game.