Ghirardato, Paolo and Marinacci, Massimo (2000) Range Convexity and Ambiguity Averse Preferences. Social Science Working Paper, 1081. California Institute of Technology , Pasadena, CA. (Unpublished) https://resolver.caltech.edu/CaltechAUTHORS:20170808-163116323
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Abstract
We show that range convexity of beliefs, a ‘technical’ condition that appears naturally in axiomatizations of preferences in a Savage-like framework, imposes some unexpected restrictions when modelling ambiguity averse preferences. That is, when it is added to a mild condition, range convexity makes the preferences collapse to subjective expected utility as soon as they satisfy structural conditions that are typically used to characterize ambiguity aversion.
| Item Type: | Report or Paper (Working Paper) | ||||||
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| Additional Information: | This paper was circulated earlier with the title “Convex-Rangedness in Decision Making with Additive and Non-Additive Beliefs." We thank Kim Border, Itzhak Gilboa, and especially Peter Wakker for helpful comments and discussion. Marinacci gratefully acknowledges the financial support of MURST. Published as Ghirardato, P., & Marinacci, M. (2001). Range convexity and ambiguity averse preferences. Economic Theory, 17(3), 599-617. | ||||||
| Group: | Social Science Working Papers | ||||||
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| Subject Keywords: | Ambiguity Aversion, Biseparable Preferences, Choquet Expected Utility, Maxmin Expected Utility, Range Convexity | ||||||
| Series Name: | Social Science Working Paper | ||||||
| Issue or Number: | 1081 | ||||||
| Classification Code: | JEL: D81 | ||||||
| Record Number: | CaltechAUTHORS:20170808-163116323 | ||||||
| Persistent URL: | https://resolver.caltech.edu/CaltechAUTHORS:20170808-163116323 | ||||||
| Usage Policy: | No commercial reproduction, distribution, display or performance rights in this work are provided. | ||||||
| ID Code: | 79983 | ||||||
| Collection: | CaltechAUTHORS | ||||||
| Deposited By: | Jacquelyn Bussone | ||||||
| Deposited On: | 09 Aug 2017 16:52 | ||||||
| Last Modified: | 03 Oct 2019 18:26 |
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