We study a definition of subjective beliefs applicable to preferences that allow for the perception of ambiguity, and provide a characterization of such beliefs in terms of market behavior. Using this definition, we derive necessary and sufficient conditions for the efficiency of ex ante trade...

This paper considers a general equilibrium model in which the distinction between uncertainty and risk is formalized by assuming agents have incomplete preferences over state-contingent consumption bundles, as in Bewley (1986). Without completeness, individual decision making depends on a set of...

The authors derive a necessary and sufficient condition for the solution set of an optimization problem to be monotonic in the parameters of the problem. In addition, they develop practical methods for checking the condition and demonstrate its applications to the classical theories of the...

This paper presents a principal-agent model in which the agent has imprecise beliefs. We model this situation formally by assuming the agent[modifier letter apostrophe]s preferences are incomplete as in Bewley (1986) [2]. In this setting, incentives must be robust to Knightian uncertainty. We...