Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/127306
Authors: 
Dominiak, Adam
Dürsch, Peter
Lefort, Jean-Philippe
Year of Publication: 
2009
Series/Report no.: 
Discussion Paper Series, University of Heidelberg, Department of Economics 487
Abstract: 
Two rationality arguments are used to justify the link between conditional and unconditional preferences in decision theory: dynamic consistency and consequentialism. Dynamic consistency requires that ex ante contingent choices are respected by updated preferences. Consequentialism states that only those outcomes which are still possible can matter for updated preferences. We test the descriptive validity of these rationality arguments with a dynamic version of Ellsberg's three color experiment and find that subjects act more often in line with consequentialism than with dynamic consistency.
Subjects: 
Non expected utility preferences
ambiguity
updating
dynamic consistency
consequentialism
JEL: 
D81
C91
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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