Probabilistic sophistication and variational preferences

Tomasz Strzalecki

Journal of Economic Theory, 2011, vol. 146, issue 5, 2117-2125

Abstract: This paper shows that in the class of variational preferences the notion of probabilistic sophistication is equivalent to expected utility as long as there exists at least one event such that the independence axiom holds for bets on that event. This extends the result of Marinacci (2002) [13] and provides a novel interpretation of his result.

Keywords: Ambiguity; aversion; Probabilistic; sophistication; Expected; utility; Variational; preferences (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (10)

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Working Paper: Probabilistic Sophistication and Variational Preferences (2011)
Working Paper: Probabilistic Sophistication and Variational Preferences
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:146:y:2011:i:5:p:2117-2125

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