Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/121343 
Year of Publication: 
2015
Series/Report no.: 
Center for Mathematical Economics Working Papers No. 546
Publisher: 
Bielefeld University, Center for Mathematical Economics (IMW), Bielefeld
Abstract: 
A decision maker (DM) makes choices from different sets of alternatives. The DM is initially fully ignorant of the payoff associated to each alternative, and learns these payoffs only after a large number of choices have been made. We show that, in the presence of an outside option once payoffs are learned, the optimal choice rule from sets of alternatives is one that is as if the DM had strict preferences over all alternatives. Under this model, the DM has preferences for preferences while being ignorant of what preferences are "right".
Subjects: 
consistency
strict preference
rationality
weak axiom of revealed preferences
JEL: 
C73
D01
D11
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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