Range convexity and ambiguity averse preferences
Copyright policy )Range convexity and ambiguity averse preferences
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.
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.
Submitted - sswp1081.pdf
- University of Turin Italy
- California Institute of Technology United States
Range convexity, Ambiguity Aversion, Biseparable Preferences, Choquet Expected Utility, Maxmin Expected Utility, Range Convexity, ambiguity aversion, Ambiguity Aversion, 330, Ambiguity aversion, expected utility, Individual preferences, Biseparable preferences, Choquet expected Utility, Maxmin expected utility, Risk theory, insurance, Range Convexity, Maxmin Expected Utility, Choquet Expected Utility, Utility theory, preferences, Biseparable Preferences
Range convexity, Ambiguity Aversion, Biseparable Preferences, Choquet Expected Utility, Maxmin Expected Utility, Range Convexity, ambiguity aversion, Ambiguity Aversion, 330, Ambiguity aversion, expected utility, Individual preferences, Biseparable preferences, Choquet expected Utility, Maxmin expected utility, Risk theory, insurance, Range Convexity, Maxmin Expected Utility, Choquet Expected Utility, Utility theory, preferences, Biseparable Preferences
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