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How to Make an Action Better

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  • Marilyn Pease
  • Mark Whitmeyer

Abstract

For two actions in a decision problem, a and b, each of which that produces a state-dependent monetary reward, we study how to robustly make action a more attractive. Action a' improves upon a in this manner if the set of beliefs at which a is preferred to b is a subset of the set of beliefs at which a' is preferred to b, irrespective of the risk-averse agent's utility function (in money). We provide a full characterization of this relation and discuss applications in politics, bilateral trade, insurance, and information acquisition.

Suggested Citation

  • Marilyn Pease & Mark Whitmeyer, 2024. "How to Make an Action Better," Papers 2408.09294, arXiv.org, revised Nov 2024.
    • Handle: RePEc:arx:papers:2408.09294
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    References listed on IDEAS

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