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Twofold multiprior preferences and failures of contingent reasoning

Echenique, Federico and Miyashita, Masaki and Nakamura, Yuta and Pomatto, Luciano and Vinson, Jamie (2022) Twofold multiprior preferences and failures of contingent reasoning. Journal of Economic Theory, 202 . Art. No. 105448. ISSN 0022-0531. doi:10.1016/j.jet.2022.105448.

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We propose a model of incomplete twofold multiprior preferences, in which an act f is ranked above an act g only when f provides higher utility in a worst-case scenario than what g provides in a best-case scenario. The model explains failures of contingent reasoning, captured through a weakening of the state-by-state monotonicity (or dominance) axiom. Our model gives rise to rich comparative statics results, as well as extension exercises, and connections to choice theory. We present an application to second-price auctions.

Item Type:Article
Related URLs:
URLURL TypeDescription Material Paper
Echenique, Federico0000-0002-1567-6770
Miyashita, Masaki0000-0002-9812-4225
Nakamura, Yuta0000-0001-9725-3159
Pomatto, Luciano0000-0002-4331-8436
Vinson, Jamie0000-0002-0267-0396
Alternate Title:Twofold Conservatism in Choice under Uncertainty
Additional Information:© 2022 Elsevier Inc. Received 6 February 2021, Revised 12 January 2022, Accepted 19 March 2022, Available online 30 March 2022, Version of Record 7 April 2022. This paper subsumes the working paper “An Axiomatic Approach to Failures in Contingent Reasoning” by Masaki Miyashita and Yuta Nakamura, and the working paper “Twofold Conservatism in Choice under Uncertainty” by Federico Echenique, Luciano Pomatto, and Jamie Vinson. We are grateful to the editor and the referees for their helpful comments and suggestions. Echenique thanks the National Science Foundation for financial support (Grants SES-1558757 and CNS-518941).
Funding AgencyGrant Number
Subject Keywords:Decision theory; Incomplete preference; Conservatism; Obvious dominance
Classification Code:JEL: D01; D81; D90
Record Number:CaltechAUTHORS:20210303-133740093
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Official Citation:Federico Echenique, Masaki Miyashita, Yuta Nakamura, Luciano Pomatto, Jamie Vinson, Twofold multiprior preferences and failures of contingent reasoning, Journal of Economic Theory, Volume 202, 2022, 105448, ISSN 0022-0531,
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:108293
Deposited By: Tony Diaz
Deposited On:03 Mar 2021 21:45
Last Modified:11 Jul 2022 18:18

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