Variational Bewley preferences

• 成果类型: Article
• 署名作者: Faro, Jose Heleno
• 署名单位: Insper
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2015.02.002
• 发表日期: 2015
• 页码: 699-729
• 关键词: Ambiguity; Knightian uncertainty; incomplete preferences; Intransitivity; Variational preferences

摘要

This paper characterizes variational Bewley preferences over Anscombe and Aumann acts, a class of binary relations that may fail completeness or transitivity vis a vis independence. The main result gives an axiomatization of preference relations greater than or similar to represented as follows: f greater than or similar to g double left right arrow integral u(f) dp + eta(p) >= integral u (g) dp for all p is an element of Delta, where u is an affine utility index over a convex set X of consequences, eta : Delta -> [0, infinity] is an ambiguity index, and A is the set of priors over the state space S. This representation has a natural interpretation as a weighted unanimity rule, with the function 77 reflecting the weight given to a prior and higher values of 77 corresponding to priors given less weight. Bewley's incomplete preferences can be identified precisely with the addition of transitivity or independence, and a prior receives weight either 0 if plausible or infinity when discarded. Also, by adding only completeness, we recover subjective expected utility, i.e., the lack of transitivity implies incompleteness Finally, we find a strong connection of our model with the class of variational preferences. (C) 2015 Elsevier Inc. All rights reserved.