Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/247191 
Year of Publication: 
2021
Series/Report no.: 
Working Paper No. 922
Publisher: 
Queen Mary University of London, School of Economics and Finance, London
Abstract: 
The α-MEU model and the smooth ambiguity model are two popular models in decision making under ambiguity. However, the axiomatic foundations of these two models are not completely understood. We provide axiomatic foundations of these models in a symmetric setting with a product state space S∞. This setting allows marginals over S to be linked behaviorally with (limiting frequency) events. Bets on such events are shown to reveal the i.i.d. measures that are relevant for the decision maker's preferences and appear in the representations. By characterizing both models within a common framework, it becomes possible to better compare and relate them.
Subjects: 
Symmetry
beliefs
ambiguity
multiple priors
smooth ambiguity
JEL: 
D01
D80
D81
D83
Document Type: 
Working Paper

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