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Comparative Statics for the Subjective

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  • Mark Whitmeyer

Abstract

I study robust comparative statics for risk-averse subjective expected utility (SEU) maximizers. Starting with a finite menu of actions totally ordered by sensitivity to risk, I identify the transformations of her menu that lead a decision-maker to take a lower action, regardless of her particular utility function or belief. My main results reveal that a robust decrease in the action selected is guaranteed by an intuitive steepening of the actions' payoffs and necessitates a slightly weaker such steepening. This basic pattern generalizes to a broad class of non-EU preferences.

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  • Mark Whitmeyer, 2025. "Comparative Statics for the Subjective," Papers 2501.12926, arXiv.org, revised Feb 2025.
    • Handle: RePEc:arx:papers:2501.12926
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    References listed on IDEAS

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