Preferences under ignorance

Olivier Gossner and Christoph Kuzmics

No 2017-52, Working Papers from Center for Research in Economics and Statistics

Abstract: A decision maker (DM) makes choices from different sets of alternatives. The DM is initially ignorant of the payoff associated to each alternative, and learns these payoffs only after a large number of choices have been made. We show that, in the presence of an outside option once payoffs are learned, the optimal choice rule from sets of alternatives is one that is as if the DM had strict preferences over all alternatives. Under this model, the DM has preferences for preferences while being ignorant of what preferences are “right”.

Keywords: consistency; rationality; weak axiom of revealed preferences; strict preference (search for similar items in EconPapers)
JEL-codes: C73 D01 D11 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2017-12-31
New Economics Papers: this item is included in nep-gth, nep-mic and nep-upt
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Related works:
Journal Article: PREFERENCES UNDER IGNORANCE (2019)
Working Paper: Preferences under ignorance (2018)
Working Paper: Preferences under ignorance (2015)
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