IDEAS home Printed from https://ideas.repec.org/p/kyo/wpaper/972.html
   My bibliography  Save this paper

Cardinal Utility Representation Separating Ambiguous Beliefs and Utility

Author

Listed:
  • Mayumi Horie

    (Hiroshima University of Economics)

Abstract

This paper proposes the weaker axioms which admit a cardinal utility representation under ambiguity separating ambiguous beliefs and utility over consequences in a purely subjective setting. The representation is obtained in an implicit form, which corresponds to the disappointment aversion utility (Gul, 1991) with respect to a nonadditive measure in place of a probability measure. It includes all the properties of cardinality, ambiguity aversion, reference dependency, gain/loss asymmetry, and the distortion in probability evaluations. It enables us to capture varying attitude toward ambiguity such as the subjective common ratio e?ect and to explain Machina?s examples (2009, 2014) in the simplest way.

Suggested Citation

  • Mayumi Horie, 2017. "Cardinal Utility Representation Separating Ambiguous Beliefs and Utility," KIER Working Papers 972, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:972
    as

    Download full text from publisher

    File URL: http://www.kier.kyoto-u.ac.jp/DP/DP972.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    isometry; implicit representation; biseparable preference; rank dependent utility; disappointment aversion; common ratio effect;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kyo:wpaper:972. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Makoto Watanabe (email available below). General contact details of provider: https://edirc.repec.org/data/iekyojp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.