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It is commonly argued that dynamic consistency, consequentialism and non-expected utility are incompatible. The first aim of this paper is to rebut such arguments, by targeting the implicit assumption that the relevant contingencies correspond to objective resolutions of uncertainty (that is,...
Persistent link: https://www.econbiz.de/10010832945
Dynamic consistency leads to Bayesian updating under expected utility. We ask what it implies for the updating of more general preferences. In this paper, we charac- terize dynamically consistent update rules for preference models satisfying ambiguity aversion. This characterization extends to...
Persistent link: https://www.econbiz.de/10005588544