Confidence as a Source of Deferral

Brian Hill ()

No 1060, HEC Research Papers Series from HEC Paris

Abstract: One apparent reason for deferring a decision – abstaining from choosing, leaving the decision open to be taken by someone else, one’s later self, or nature – is for lack of sufficient confidence in the relevant beliefs. This paper develops an axiomatic theory of decision in situations where a costly deferral option is available that captures this source of deferral. Drawing on it, a preliminary behavioural comparison with other accounts of deferral, such as those based on information asymmetry, is undertaken, and a simple multi-factor model of deferral – involving both confidence and information considerations – is formulated. The model suggests that incorporating confidence can account for cases of deferral that traditional accounts have trouble explaining.

Keywords: Confidence; multiple priors; deferral; delegation; information acquisition; value of information; incomplete preferences (search for similar items in EconPapers)
JEL-codes: D80 D81 D83 (search for similar items in EconPapers)
Pages: 65 pages
Date: 2014-10-10
New Economics Papers: this item is included in nep-mic
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1060

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