Year: 2016
Type: article
Abstract: As in [Gilboa et al.., 2010], we consider a decision maker characterized by two binary relations: ≿* and ≿∧. The first binary relation is a Bewley preference. It models the rankings for which the decision maker is sure. The second binary relation is an uncertainty averse preference, as defined by [Cerreia-Vioglio et al.., 2011c]. It models the rankings that the decision maker expresses if he has to make a choice. We assume that ≿∧ is a completion of ≿*. We identify axioms under which the set of probabilities and the utility index representing ≿* are the same as those representing ≿∧. In this way, we show that Bewley preferences and uncertainty averse preferences, two different approaches to modelling decision making under Knightian uncertainty, are complementary. As a by-product, we extend the main result of [Gilboa et al.., 2010], who restrict their attention to maxmin expected utility completions.
Source: Theoretical Economics
DOI: 10.3982/te1193
Author: Simone Cerreia-Vioglio
Institution: Bocconi University
Language: English
Subfield: General Decision Sciences
Field: Decision Sciences
Domain: Social Sciences
Open Access status: diamond
Funder: European Research Council
OpenAlex ID: W2117901434