Awareness of Unawareness: A Theory of Decision Making in the Face of Ignorance

Edi Karni and Marie-Louise VierÃÿ

No 274647, Queen's Economics Department Working Papers from Queen's University - Department of Economics

Abstract: In the wake of growing awareness, decision makers anticipate that they might acquire knowledge that, in their current state of ignorance, is unimaginable. Supposedly, this anticipation manifests itself in the decision makers' choice behavior. In this paper we model the anticipation of growing awareness, lay choice-based axiomatic foundations to a subjective expected utility representation of beliefs about the likelihood of discovering unknown consequences, and assign utility to consequences that are not only unimaginable but may also be nonexistent. In so doing, we maintain the avor of reverse Bayesianism of Karni and Viero

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 42
Date: 2014-01
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Related works:
Journal Article: Awareness of unawareness: A theory of decision making in the face of ignorance (2017)
Working Paper: Awareness Of Unawareness: A Theory Of Decision Making In The Face Of Ignorance (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:quedwp:274647

DOI: 10.22004/ag.econ.274647

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