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Title:Awareness-dependent subjective expected utility PDF Logo
Authors:Schipper, Burkhard
Issue Date:2011
Series/Report no.:Working Papers, University of California, Department of Economics 10,22
Abstract:We develop awareness-dependent subjective expected utility by taking unawareness structures introduced in Heifetz, Meier, and Schipper (2006, 2008, 2011a) as primitives in the Anscombe-Aumann approach to subjective expected utility. We observe that a decision maker is unaware of an event if and only if her choices reveal that the event is null and the negation of the event is null. Moreover, we characterize impersonal expected utility that is behaviorally indistinguishable from awareness-dependent subject expected utility and assigns probability zero to some subsets of states that are not necessarily events. We discuss in what sense probability zero can model unawareness.
Subjects:unawareness
awareness
unforeseen contingencies
null
probability
zero
subjective expected utility
Anscombe-Aumann
small worlds
JEL:C70
C72
D03
D80
D81
Document Type:Working Paper
Appears in Collections:Working Papers, Department of Economics, UC Davis

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