Subjective ambiguity and preference for flexibility

Gorno, Leandro; Natenzon, Paulo

doi:10.1016/j.jebo.2018.07.009

Cited by 4 publications

(3 citation statements)

References 15 publications

(12 reference statements)

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“…He evaluates each menu by its worst possible state. This conclusion was proved by Gorno and Natenzon (), who in fact show that any weakly monotonic menu preference ≿ can be represented in this manner. Notice the difference from Kreps (), who requires weak monotonicity and an additional submodularity axiom to derive a representation of the form

\sum_{u} π false(u false) {normalmax}_{z \in A} u false(z false)

, where π is a distribution over utility functions.…”

Section: A Maxmin Representation Of Convex Preferencesmentioning

confidence: 66%

Convex preferences: A new definition

Richter

Rubinstein

2019

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We suggest a concept of convexity of preferences that does not rely on any algebraic structure. A decision maker has in mind a set of orderings interpreted as evaluation criteria. A preference relation is defined to be convex when it satisfies the following condition: If, for each criterion, there is an element that is both inferior to b by the criterion and superior to a by the preference relation, then b is preferred to a. This definition generalizes the standard Euclidean definition of convex preferences. It is shown that under general conditions, any strict convex preference relation is represented by a maxmin of utility representations of the criteria. Some economic examples are provided.

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\sum_{u} π false(u false) {normalmax}_{z \in A} u false(z false)

, where π is a distribution over utility functions.…”

Section: A Maxmin Representation Of Convex Preferencesmentioning

confidence: 66%

Convex preferences: A new definition

Richter

Rubinstein

2019

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“…Another possible explanation is a preference for flexibility , according to which the preference for { x, y } over { x } may arise when the preferences over the single alternatives are not totally certain at the moment of evaluating the menus. Such uncertainty is then expected to be solved before the final alternative has to be selected from the set at the second stage of the decision process (see Kreps, 1979;Nehring, 1999;Ahn and Sarver, 2013;Gorno and Natenzon, 2018 ). Intrinsic value of freedom of choice enters in contradiction with the standard principles of rationality, but preference for flexibility is compatible with them under an appropriate modelling by means of contingent utility functions.…”

Section: Literature Reviewmentioning

confidence: 99%

Attitudes toward choice with incomplete preferences: An experimental study

Arlegi

Bourgeois‐Gironde

Hualde

2022

Journal of Economic Behavior & Organization

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“…Another possible explanation is a preference for flexibility, according to which the preference for {x, y} over {x} may arise when the preferences over the single alternatives are not totally certain at the moment of evaluating the menus. Such uncertainty is then expected to be solved before the final alternative has to be selected from the set at the second stage of the decision process (see Kreps, 1979;Nehring, 1999;Ahn and Sarver, 2013;Gorno and Natenzon, 2018). Intrinsic value of freedom of choice enters in contradiction with the standard principles of rationality, but preference for flexibility is compatible with them under an appropriate modelling by means of contingent utility functions.…”

Section: Introductionmentioning

confidence: 99%

Aversion to choice and other choice attitudes: theoretical and experimental essays

Hualde¹

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This thesis consists of four essays whose thread is the incompleteness of preferences and how it determines attitudes toward choice. Classical economics assumes that preferences are complete, that is: for any two alternatives x and y, any individual is able to state if she prefers having x, y or any of them. However, there are situations where two alternatives are difficult to compare. Thus, this thesis departs from the assumption that presumes the human ability to compare any two alternatives. As a direct consequence of this inability, the ingrained thinking (at least in western societies), which is also a basic principle of standard rational choice, that 'the more choice we have, the better we are' may become questionable. In particular, when a DM knows for certain that she will not be able to compare two alternatives present on a choice set, it is plausible that she may want to get rid of one of them in order to avoid facing such an impossible comparison. If this is the case, we will say that the DM is averse to incomplete preferences. However, if the DM expects the incompleteness to be solved, it makes sense tomaintain all options available in order to choose the best option in the future. This iscalled “preference for flexibility” and is rooted in the work by Kreps (1979). Twistingthe above examples, if each of Sophie’s children had eaten one of the mushrooms omelets in the first example, Sophie would have wanted to wait until observing whichchild started to feel sick in order to choose the one that would be gassed. Thus, incomplete preferences can lead to opposite attitudes toward choice, depending onthe time of resolution (if any) of the incompleteness.

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Subjective ambiguity and preference for flexibility

Cited by 4 publications

References 15 publications

Convex preferences: A new definition

Convex preferences: A new definition

Attitudes toward choice with incomplete preferences: An experimental study

Aversion to choice and other choice attitudes: theoretical and experimental essays

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