Expected Utility without Parsimony.

This paper seeks to interpret observable behavior and departures from Savage's model of Subjective Expected Utility (SEU) in terms of knowledge and belief. It is shown that observable behavior displays sensitivity to ambiguity if and only if knowledge and belief disagree. In addition, such an epistemic interpretation of ambiguity leads to dynamically consistent extensions of non-SEU preferences.

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Year of publication:	2014-03
Authors:	Billot, Antoine ; Vergopoulos, Vassili
Institutions:	Centre d'Économie de la Sorbonne, Université Paris 1 (Panthéon-Sorbonne)
Subject:	Ambiguity \| state of the world \| knowledge \| dynamic consistency

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Extent:	application/pdf
Series:	Documents de travail du Centre d'Economie de la Sorbonne. - ISSN 1955-611X.
Type of publication:	Book / Working Paper
Notes:	16 pages
Classification:	D81 - Criteria for Decision-Making under Risk and Uncertainty ; D83 - Search, Learning, Information and Knowledge ; D90 - Intertemporal Choice and Growth. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010791265