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Indecisiveness aversion and preference for commitment

Author

Listed:
  • Eric Danan

    (Université de Cergy-Pontoise, THEMA, 33 boulevard du Port, F-95000 Cergy-Pontoise)

  • Ani Guerdjikovaz

    (Cornell University, Department of Economics, Uris Hall 462, Ithaca, NY 14853, USA)

  • Alexander Zimper

    (University of Johannesburg, Department of Economics and Econometrics, PO Box 524 Aucland Park, 2006 Johannesburg, South Africa)

Abstract
We present a system of behavioral axioms for preferences over menus that is motivated by three assumptions. First, the decision maker is uncertain ex ante (i.e. at the time of choosing a menu) about her ex post (i.e. at the time of choosing an option within her chosen menu) preferences over options, and she anticipates that this subjective uncertainty will only resolve after the ex post stage. Second, she is averse to ex post indecisiveness (i.e. to having to choose between options that she cannot rank with certainty). Third, when evaluating a menu she discards options that are dominated (i.e. inferior to another option whatever her ex post preferences may be) and restricts attention to the undominated ones. Under these assumptions, the decision maker has a preference for commitment in the sense of preferring menus with fewer undominated alternatives. We derive a representation in which the decision maker's uncertainty about her ex post preferences is captured by means of a subjective state space, which in turn determines which options are undominated in a given menu, and in which the decision maker fears, whenever indecisive, to choose an option that will turn out to be the worst (undominated) one according to the realization of her ex post preferences.

Suggested Citation

  • Eric Danan & Ani Guerdjikovaz & Alexander Zimper, 2009. "Indecisiveness aversion and preference for commitment," THEMA Working Papers 2009-04, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    • Handle: RePEc:ema:worpap:2009-04
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    References listed on IDEAS

    as
    1. Eddie Dekel & Barton L. Lipman & Aldo Rustichini, 2009. "Temptation-Driven Preferences," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(3), pages 937-971.
    2. Ortoleva, Pietro, 2013. "The price of flexibility: Towards a theory of Thinking Aversion," Journal of Economic Theory, Elsevier, vol. 148(3), pages 903-934.
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    Citations

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    Cited by:

    1. Koida, Nobuo, 2022. "Indecisiveness, preference for flexibility, and a unique subjective state space," Journal of Mathematical Economics, Elsevier, vol. 103(C).
    2. Özgür Evren, 2012. "Scalarization Methods and Expected Multi-Utility Representations," Working Papers w0174, New Economic School (NES).
    3. Fabrice Le Lec & Marianne Lumeau & Benoît Tarroux, 2016. "Choice or information overload ?," Economics Working Paper Archive (University of Rennes & University of Caen) 2016-07, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    4. Arlegi, Ritxar & Bourgeois-Gironde, Sacha & Hualde, Mikel, 2022. "Attitudes toward choice with incomplete preferences: An experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 663-679.
    5. Costa-Gomes, Miguel & Cueva, Carlos & Gerasimou, Georgios, 2014. "Choice, Deferral and Consistency," SIRE Discussion Papers 2015-17, Scottish Institute for Research in Economics (SIRE).
    6. McCarthy, David & Mikkola, Kalle, 2018. "Continuity and completeness of strongly independent preorders," Mathematical Social Sciences, Elsevier, vol. 93(C), pages 141-145.
    7. Ritxar Arlegi & Sacha Bourgeois-Gironde & Mikel Hualde, 2021. "On the aversion to incomplete preferences," Theory and Decision, Springer, vol. 90(2), pages 183-217, March.
    8. McCarthy, David & Mikkola, Kalle & Thomas, Teruji, 2017. "Representation of strongly independent preorders by sets of scalar-valued functions," MPRA Paper 79284, University Library of Munich, Germany.
    9. Costa-Gomes, Miguel & Cueva, Carlos & Gerasimou, Georgios, 2014. "Choice, Deferral and Consistency," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-17, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Costa-Gomes, Miguel & Cueva, Carlos & Gerasimou, Georgios, 2014. "Choice, Deferral and Consistency," SIRE Discussion Papers 2015-17, Scottish Institute for Research in Economics (SIRE).
    11. Evren, Özgür, 2014. "Scalarization methods and expected multi-utility representations," Journal of Economic Theory, Elsevier, vol. 151(C), pages 30-63.

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    More about this item

    Keywords

    Opportunity sets; subjective uncertainty; indecisiveness; dominance;
    All these keywords.

    JEL classification:

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

    NEP fields

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