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Ensemble Prospectism

Author

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  • Kim Kaleva Kaivanto

Abstract

Incomplete preferences displaying ‘mildly sweetened’ structure are common, yet theoretically problematic. This paper examines the properties of the rankings induced by the set of all coherent completions of the mildly sweetened partial preference structure. Building on these properties, I propose an ensemble-based refinement of Hare’s (Analysis 70:237–247, 2010) prospectism criterion for rational choice when preferences are incomplete. Importantly, this ensemble-based refinement is immune to Peterson’s (Theory & Decision 78:451–456, 2015) weak money pump argument. Hence, ensemble prospectism ensures outcome rationality. Furthermore, by recognizing the structural isomorphism between mildly sweetened preference structures and Cover’s splitting rule in Blackwell’s Pick the Largest Number problem (Ann Math Stat 22:393–399, 1951), ensemble prospectism can be shown to yield better-than-even odds of selecting the expost higher-utility option – despite the absence of all-things-considered preferences ex ante.

Suggested Citation

  • Kim Kaleva Kaivanto, 2016. "Ensemble Prospectism," Working Papers 144439430, Lancaster University Management School, Economics Department.
    • Handle: RePEc:lan:wpaper:144439430
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    References listed on IDEAS

    as
    1. 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.
    2. Mandler, Michael, 2005. "Incomplete preferences and rational intransitivity of choice," Games and Economic Behavior, Elsevier, vol. 50(2), pages 255-277, February.
    3. repec:bla:econom:v:40:y:1973:i:159:p:241-59 is not listed on IDEAS
    4. Sugden, Robert, 1991. "Rational Choice: A Survey of Contributions from Economics and Philosophy," Economic Journal, Royal Economic Society, vol. 101(407), pages 751-785, July.
    5. Michael Mandler, 2004. "Status quo maintenance reconsidered: changing or incomplete preferences?," Economic Journal, Royal Economic Society, vol. 114(499), pages 518-535, November.
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    More about this item

    Keywords

    Prospectism; Refinement; Money pump; Outcome rationality; Ensemble method; Voting rules; Incomplete preferences; Mildly sweetened preferences; Cover rule; Hare; Peterson;
    All these keywords.

    JEL classification:

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

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