Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/150285
Authors: 
Cerreia-Vioglio, Simone
Year of Publication: 
2016
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 11 [Year:] 2016 [Issue:] 2 [Pages:] 523-545
Abstract: 
As in Gilboa, Maccheroni, Marinacci, and Schmeidler \cite{GMMS}, we consider a decision maker characterized by two binary relations: $\succsim\ast}$ and $\succsim{\small \wedge}}$. The first binary relation is a Bewley preference. It\ models the rankings for which the decision maker is sure. The second binary relation is an uncertainty averse preference, as defined by Cerreia-Vioglio, Maccheroni, Marinacci, and Montrucchio \cite{CMMM}. It models the rankings that the decision maker expresses if he has to make a choice. We assume that $\succsim{\small \wedge}}$ is a completion of $\succsim\ast}% $.\ We identify axioms under which the set of probabilities and the utility index representing $\succsim\ast}$ are the same as those representing $\succsim{\small \wedge}}$. In this way, we show that Bewley preferences and uncertainty averse preferences, two different approaches in modelling decision making under Knightian uncertainty, are complementary. As a by-product, we extend the main result of Gilboa, Maccheroni, Marinacci, and Schmeidler \cite{GMMS}, who restrict their attention to maxmin expected utility completions.
Subjects: 
Ambiguity
Bewley preferences
uncertainty averse preferences
preferences completion
JEL: 
D81
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Article

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