This paper considers an exchange economy under uncertainty with asymmetric information. Uncertainty is represented by multiple priors and posteriors of agents who have either Bewley's incomplete preferences or Gilboa-Schmeidler's maximin expected utility preferences. The main results...

We present a model of incomplete information games with sets of priors. Upon arrival of private information, each player "updates" by the Bayes rule each of priors in this set to construct the set of posteriors consistent with the arrived piece of information. Then the player uses a possibly...

This paper considers a two agent model of trade with multiple priors. First, we characterize the existence of an agreeable bet on some event in terms of the set of priors. It is then shown that the existence of an agreeable bet on some event is a strictly stronger condition than the existence of...

This paper proposes a class of weak additivity concepts for an operator on the set of real valued functions on a finite state space Ω, which include additivity and comonotonic additivity as extreme cases. Let E ⊆ 2Ω be a collection of subsets of Ω. Two functions x and y on Ω are...

This paper proposes a class of weak additivity concepts for an operator on the set of real valued functions on a finite state space \omega, which include additivity and comonotonic additivity as extreme cases. Let \epsilon be a collection of subsets of \omega. Two functions x and y on \omega are...

This paper presents a general framework to understand the possibility of a purely speculative trade under asymmetric information, where the decision making rule of each trader conforms to the multiple priors model (Gibloa and Schmeidler, 1989): the agents are interested in the minimum of the...

We consider an exchange economy under uncertainty, in which agents' utility functions exhibit constant absolute risk aversion, but they may be recursive and the expected utility calculation may be based on multiple subjective beliefs. The risk aversion coefficients, subjective beliefs,...

We offer an evolutionary explanation for the favorite-longshot bias in pari-mutuel betting, in a simple evolutionary market model. Because of a positive track take, the expected returns of any strategy stay negative and so any agent must vanish in the long run. Those who bet on favorites lose...

When individuals' labor and capital income are subject to uninsurable idiosyncratic risks, should capital and labor be taxed, and if so how? In a two period general equilibrium model with production, we derive a decomposition formula of the welfare effects of these taxes into insurance and...

We characterize the intersection of the probabilistically sophisticated and multiple prior models. We show this class is strictly larger than the subjective expected utility model and that its elements can be generated from a generalized class of the -contaminated priors, which we dub the -...