[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/cca/wpaper/73.html
   My bibliography  Save this paper

Objective and Subjective Rationality in a Multiple Prior Model

Author

Listed:
  • Itzhak Gilboa
  • Fabio Maccheroni
  • Massimo Marinacci
  • David Schmeidler
Abstract
A decision maker is characterized by two binary relations. The first reflects decisions that are rational in an “objective” sense: the decision maker can convince others that she is right in making them. The second relation models decisions that are rational in a “subjective” sense: the decision maker cannot be convinced that she is wrong in making them. We impose axioms on these relations that allow a joint representation by a single set of prior probabilities. It is “objectively rational” to choose f in the presence of g if and only if the expected utility of f is at least as high as that of g given each and every prior in the set. It is “subjectively rational” to choose f rather than g if and only if the minimal expected utility of f (relative to all priors in the set) is at least as high as that of g.

Suggested Citation

  • Itzhak Gilboa & Fabio Maccheroni & Massimo Marinacci & David Schmeidler, 2008. "Objective and Subjective Rationality in a Multiple Prior Model," Carlo Alberto Notebooks 73, Collegio Carlo Alberto, revised 2008.
    • Handle: RePEc:cca:wpaper:73
    as

    Download full text from publisher

    File URL: https://www.carloalberto.org/wp-content/uploads/2018/11/no.73.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Mandler, Michael, 2005. "Incomplete preferences and rational intransitivity of choice," Games and Economic Behavior, Elsevier, vol. 50(2), pages 255-277, February.
    2. Ok, Efe A., 2002. "Utility Representation of an Incomplete Preference Relation," Journal of Economic Theory, Elsevier, vol. 104(2), pages 429-449, June.
    3. Efe A. Ok & Pietro Ortoleva & Gil Riella, 2012. "Incomplete Preferences Under Uncertainty: Indecisiveness in Beliefs versus Tastes," Econometrica, Econometric Society, vol. 80(4), pages 1791-1808, July.
    4. Dubra, Juan & Maccheroni, Fabio & Ok, Efe A., 2004. "Expected utility theory without the completeness axiom," Journal of Economic Theory, Elsevier, vol. 115(1), pages 118-133, March.
    5. Danan, Eric, 2008. "Revealed preference and indifferent selection," Mathematical Social Sciences, Elsevier, vol. 55(1), pages 24-37, January.
    6. Peleg, Bezalel, 1970. "Utility Functions for Partially Ordered Topological Spaces," Econometrica, Econometric Society, vol. 38(1), pages 93-96, January.
    7. Baucells, Manel & Shapley, Lloyd S., 2008. "Multiperson utility," Games and Economic Behavior, Elsevier, vol. 62(2), pages 329-347, March.
    8. Gajdos, T. & Hayashi, T. & Tallon, J.-M. & Vergnaud, J.-C., 2008. "Attitude toward imprecise information," Journal of Economic Theory, Elsevier, vol. 140(1), pages 27-65, May.
    9. Prendergast, Canice & Stole, Lars, 1996. "Impetuous Youngsters and Jaded Old-Timers: Acquiring a Reputation for Learning," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1105-1134, December.
    10. Levy, Gilat, 2004. "Anti-herding and strategic consultation," European Economic Review, Elsevier, vol. 48(3), pages 503-525, June.
    11. Evren, Özgür & Ok, Efe A., 2011. "On the multi-utility representation of preference relations," Journal of Mathematical Economics, Elsevier, vol. 47(4-5), pages 554-563.
    12. Eric Danan & Anthony Ziegelmeyer, 2006. "Are preferences complete? An experimental measurement of indecisiveness under risk," Papers on Strategic Interaction 2006-01, Max Planck Institute of Economics, Strategic Interaction Group.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eric Danan, 2010. "Randomization vs. Selection: How to Choose in the Absence of Preference?," Management Science, INFORMS, vol. 56(3), pages 503-518, March.
    2. Gerasímou, Georgios, 2010. "Consumer theory with bounded rational preferences," Journal of Mathematical Economics, Elsevier, vol. 46(5), pages 708-714, September.
    3. Gorno, Leandro & Rivello, Alessandro T., 2023. "A maximum theorem for incomplete preferences," Journal of Mathematical Economics, Elsevier, vol. 106(C).
    4. Pivato, Marcus, 2013. "Multiutility representations for incomplete difference preorders," Mathematical Social Sciences, Elsevier, vol. 66(3), pages 196-220.
    5. Özgür Evren, 2012. "Scalarization Methods and Expected Multi-Utility Representations," Working Papers w0174, Center for Economic and Financial Research (CEFIR).
    6. Evren, Özgür, 2014. "Scalarization methods and expected multi-utility representations," Journal of Economic Theory, Elsevier, vol. 151(C), pages 30-63.
    7. Leandro Gorno, 2018. "The structure of incomplete preferences," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 66(1), pages 159-185, July.
    8. Giarlotta, Alfio & Greco, Salvatore, 2013. "Necessary and possible preference structures," Journal of Mathematical Economics, Elsevier, vol. 49(2), pages 163-172.
    9. Weixuan Xia, 2023. "Optimal Consumption--Investment Problems under Time-Varying Incomplete Preferences," Papers 2312.00266, arXiv.org.
    10. Minardi, Stefania & Savochkin, Andrei, 2015. "Preferences with grades of indecisiveness," Journal of Economic Theory, Elsevier, vol. 155(C), pages 300-331.
    11. Simone Cerreia-Vioglio & Alfio Giarlotta & Salvatore Greco & Fabio Maccheroni & Massimo Marinacci, 2020. "Rational preference and rationalizable choice," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 69(1), pages 61-105, February.
    12. Pivato, Marcus, 2009. "Social choice with approximate interpersonal comparisons of well-being," MPRA Paper 17060, University Library of Munich, Germany.
    13. McCarthy, David & Mikkola, Kalle & Thomas, Teruji, 2021. "Expected utility theory on mixture spaces without the completeness axiom," Journal of Mathematical Economics, Elsevier, vol. 97(C).
    14. Elena Cettolin & Arno Riedl, 2015. "Revealed Incomplete Preferences under Uncertainty," CESifo Working Paper Series 5359, CESifo.
    15. Qiyan Ong & Jianying Qiu, 2023. "Paying for randomization and indecisiveness," Journal of Risk and Uncertainty, Springer, vol. 67(1), pages 45-72, August.
    16. John D. Hey & Yudistira Permana & Nuttaporn Rochanahastin, 2018. "When and how to satisfice: an experimental investigation," World Scientific Book Chapters, in: Experiments in Economics Decision Making and Markets, chapter 5, pages 121-137, World Scientific Publishing Co. Pte. Ltd..
    17. Cettolin, Elena & Riedl, Arno, 2019. "Revealed preferences under uncertainty: Incomplete preferences and preferences for randomization," Journal of Economic Theory, Elsevier, vol. 181(C), pages 547-585.
    18. McClellon, Morgan, 2016. "Confidence models of incomplete preferences," Mathematical Social Sciences, Elsevier, vol. 83(C), pages 30-34.
    19. Eric Danan & Thibault Gajdos & Jean-Marc Tallon, 2015. "Harsanyi's Aggregation Theorem with Incomplete Preferences," American Economic Journal: Microeconomics, American Economic Association, vol. 7(1), pages 61-69, February.
    20. Cosimo Munari, 2020. "Multi-utility representations of incomplete preferences induced by set-valued risk measures," Papers 2009.04151, arXiv.org.

    More about this item

    Keywords

    Rationality; Multiple Priors.;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cca:wpaper:73. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Giovanni Bert (email available below). General contact details of provider: https://edirc.repec.org/data/fccaait.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.