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Multiple tastes and beliefs with an infinite prize space

Author

Listed:
  • Kazuhiro Hara

    (FGV EPGE Brazilian School of Economics and Finance)

  • Gil Riella

    (Getulio Vargas Foundation)

Abstract

All previous axiomatizations of the multi-prior expected multi-utility representation work under the restriction of a finite prize space. In this paper we present an axiomatization of that model when the prize space is an arbitrary compact metric space. This opens the possibility of applying the model to new situations, like a setup with monetary lotteries and certainty equivalents. We illustrate this point with two applications. In addition, we use our main result to prove that the finite prize space assumption in Galaabaatar and Karni (Econometrica 81(1):255–284, 2013) can be weakened to a compact metric prize space.

Suggested Citation

  • Kazuhiro Hara & Gil Riella, 2023. "Multiple tastes and beliefs with an infinite prize space," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(2), pages 417-444, August.
    • Handle: RePEc:spr:joecth:v:76:y:2023:i:2:d:10.1007_s00199-022-01452-2
    DOI: 10.1007/s00199-022-01452-2
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    References listed on IDEAS

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    1. Simone Cerreia‐Vioglio & David Dillenberger & Pietro Ortoleva, 2015. "Cautious Expected Utility and the Certainty Effect," Econometrica, Econometric Society, vol. 83, pages 693-728, March.
    2. Kazuhiro Hara & Efe A. Ok & Gil Riella, 2019. "Coalitional Expected Multi‐Utility Theory," Econometrica, Econometric Society, vol. 87(3), pages 933-980, May.
    3. Itzhak Gilboa & Fabio Maccheroni & Massimo Marinacci & David Schmeidler, 2010. "Objective and Subjective Rationality in a Multiple Prior Model," Econometrica, Econometric Society, vol. 78(2), pages 755-770, March.
    4. Gilboa, Itzhak & Schmeidler, David, 1989. "Maxmin expected utility with non-unique prior," Journal of Mathematical Economics, Elsevier, vol. 18(2), pages 141-153, April.
    5. Dubra, Juan & Maccheroni, Fabio & Ok, Efe A., 2004. "Expected utility theory without the completeness axiom," Journal of Economic Theory, Elsevier, vol. 115(1), pages 118-133, March.
    6. Brian Hill, 2019. "A Non‐Bayesian Theory of State‐Dependent Utility," Econometrica, Econometric Society, vol. 87(4), pages 1341-1366, July.
    7. Gil Riella, 2015. "On the representation of incomplete preferences under uncertainty with indecisiveness in tastes and beliefs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 58(3), pages 571-600, April.
    8. Evren, Özgür, 2014. "Scalarization methods and expected multi-utility representations," Journal of Economic Theory, Elsevier, vol. 151(C), pages 30-63.
    9. Efe A. Ok & Pietro Ortoleva & Gil Riella, 2012. "Incomplete Preferences Under Uncertainty: Indecisiveness in Beliefs versus Tastes," Econometrica, Econometric Society, vol. 80(4), pages 1791-1808, July.
    10. Tsogbadral Galaabaatar & Edi Karni, 2013. "Subjective Expected Utility With Incomplete Preferences," Econometrica, Econometric Society, vol. 81(1), pages 255-284, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Incomplete preferences under uncertainty; State-dependent utility function; Multi-prior expected multi-utility representation; Cautious expected utility;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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