Contingent preference for flexibility: Eliciting beliefs from behavior

• 成果类型: Article
• 署名作者: Sadowski, Philipp
• 署名单位: Duke University
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1933-6837
• DOI: 10.3982/TE884
• 发表日期: 2013-05-01
• 页码: 503-534
• 关键词: Preference for flexibility; unique beliefs; unforeseen contingencies; incomplete contracts

摘要

Following Kreps (1979), I consider a decision maker who is uncertain about her future taste. This uncertainty leaves the decision maker with a preference for flexibility: When choosing among menus that contain alternatives for future choice, she weakly prefers menus with additional alternatives. Standard representations that accommodate this choice pattern cannot distinguish tastes (indexed by a subjective state space) and beliefs (a probability measure over the subjective states) as different concepts. I allow choice between menus to depend on objective states. My axioms provide a representation that uniquely identifies beliefs, provided objective states are sufficiently relevant for choice. I suggest that this result can provide choice theoretic substance to the assumption, commonly made in the (incomplete) contracting literature, that contracting parties who know each others' ranking of contracts also share beliefs about each others' future tastes in the face of unforeseen contingencies.