Understanding the nonadditive probability decision model

The consequences of ambiguity for partnerships are addressed. Partnerships with symmetric linear production functions are analysed in a Choquet Expected Utility (CEU)-framework. Nash equilibrium in pure strategies is extended to CEU-games. A class of sharing rules are proposed that make constructive use of strategic ambiguity in partnerships. Results on ex ante efficiency and ex post efficiency of the outcomes are presented.

show abstract

Section: Rationalitymentioning

confidence: 94%

The Supply of Information by a Concerned Expert

Caplin

Leahy

2004

The Economic Journal

104

View full text Add to dashboard Cite

show abstract

“…An advantage of these linear approaches is that the resulting representations are well defined over lower dimensional sets, which our measure‐theoretic approach must finesse. Finally, Ghirardato (2001), Jaffray and Jeleva (2004), Mukerji (1997), and Nehring (1999) consider multi‐valued acts, which map states of the world to sets of consequences, while Viero (2006) considers acts which map to sets of lotteries.…”

Section: Introductionmentioning

confidence: 99%

Ambiguity Without a State Space

Ahn¹

2008

Rev Econ Studies

113

110

View full text Add to dashboard Cite

Many decisions involve both imprecise probabilities and intractable states of the world. Objective expected utility assumes unambiguous probabilities; subjective expected utility assumes a completely specified state space. This paper analyses a third domain of preference: sets of consequential lotteries. Using this domain, we develop a theory of objective ambiguity without explicit reference to any state space. We characterize a representation that integrates a non-linear transformation of first-order expected utility with respect to a second-order measure. The concavity of the transformation and the weighting of the measure capture ambiguity aversion. We propose a definition for comparative ambiguity aversion. Copyright 2008 The Review of Economic Studies Limited.

show abstract

“…It could be argued that our model even satisfies this stronger definition of rationality if it is a reduced form of a more complex model, in which individuals are acting to protect themselves against possible mis‐specifications of the model. The point is argued in more detail in Kelsey and Milne (1999) and Mukerji (1997). Intuitively, an argument for ambiguity is that it applies in situations in which individuals do not completely understand the environment in which they are operating.…”

Section: 1 Rationalitymentioning

confidence: 99%

Ambiguity in Partnerships

Kelsey

Spanjers²

2004

The Economic Journal

View full text Add to dashboard Cite

The consequences of ambiguity for partnerships are addressed. Partnerships with symmetric linear production functions are analysed in a Choquet Expected Utility (CEU)-framework. Nash equilibrium in pure strategies is extended to CEU-games. A class of sharing rules are proposed that make constructive use of strategic ambiguity in partnerships. Results on ex-ante e±ciency and ex-post e±ciency of the outcomes are presented.

show abstract

Understanding the nonadditive probability decision model

Cited by 104 publications

References 17 publications

The Supply of Information by a Concerned Expert

The Supply of Information by a Concerned Expert

Ambiguity Without a State Space

Ambiguity in Partnerships

Contact Info

Product

Resources

About