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A Subjective Spin on Roulette Wheels

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  • Ghirardato, Paolo
  • Maccheroni, Fabio
  • Marinacci, Massimo
  • Siniscalchi, Marciano

Abstract

We provide a simple behavioral definition of 'subjective mixture' of acts for a large class of (not necessarily expected-utility) preferences. Subjective mixtures enjoy the same algebraic properties as the 'objective mixtures' used to great advantage in the decision setting introduced by Anscombe and Aumann (1963). This makes it possible to formulate mixture-space axioms in a fully subjective setting. For illustration, we present simple subjective axiomatizations of some models of choice under uncertainty, including Bewley's model of choice with incomplete preferences (2002). Copyright The Econometric Society 2003.
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Suggested Citation

  • Ghirardato, Paolo & Maccheroni, Fabio & Marinacci, Massimo & Siniscalchi, Marciano, 2001. "A Subjective Spin on Roulette Wheels," Working Papers 1127, California Institute of Technology, Division of the Humanities and Social Sciences.
    • Handle: RePEc:clt:sswopa:1127
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    1. Casadesus-Masanell, Ramon & Klibanoff, Peter & Ozdenoren, Emre, 2000. "Maxmin Expected Utility over Savage Acts with a Set of Priors," Journal of Economic Theory, Elsevier, vol. 92(1), pages 35-65, May.
    2. Casadesus-Masanell, Ramon & Klibanoff, Peter & Ozdenoren, Emre, 2000. "Maxmin expected utility through statewise combinations," Economics Letters, Elsevier, vol. 66(1), pages 49-54, January.
    3. Hong Chew Soo & Karni Edi, 1994. "Choquet Expected Utility with a Finite State Space: Commutativity and Act-Independence," Journal of Economic Theory, Elsevier, vol. 62(2), pages 469-479, April.
    4. Ramon Casadesus-Masanell & Peter Klibanoff & Emre Ozdenoren, 1998. "Maximum Expected Utility over Savage Acts with a Set of Priors," Discussion Papers 1218, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    5. Truman F. Bewley, 1986. "Knightian Decision Theory: Part 1," Cowles Foundation Discussion Papers 807, Cowles Foundation for Research in Economics, Yale University.
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