Preference for Flexibility and Dynamic Consistency

• 成果类型: Article
• 署名作者: Riella, Gil
• 署名单位: Universidade de Brasilia
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2013.09.001
• 发表日期: 2013
• 页码: 2467-2482
• 关键词: Preference for flexibility; dynamic consistency; Bayesian updating; subjective state space

摘要

Dekel, Lipman, and Rustichini [3] characterize preferences over menus of lotteries that can be represented by the use of a unique subjective state space and a prior. We investigate what would be the appropriate version of Dynamic Consistency in such a setup. The condition we find, which we call Flexibility Consistency, is linked to a comparative theory of preference for flexibility. When the subjective state space is finite, we show that Flexibility Consistency is equivalent to a subjective version of Dynamic Consistency and that it implies that the decision maker is a subjective state space Bayesian updater. Later we characterize when a collection of signals can be interpreted as a partition of the subjective state space of the decision maker. (C) 2013 Elsevier Inc. All rights reserved.