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Axioms for minimax regret choice correspondences

Jörg Stoye

Journal of Economic Theory, 2011, vol. 146, issue 6, 2226-2251

Abstract: This paper unifies and extends the recent axiomatic literature on minimax regret. It compares several models of minimax regret, shows how to characterize the according choice correspondences in a unified setting, extends one of them to choice from convex (through randomization) sets, and connects them by defining a behavioral notion of perceived ambiguity. Substantively, a main idea is to behaviorally identify ambiguity with failures of independence of irrelevant alternatives. Regarding proof technique, the core contribution is to uncover a dualism between choice correspondences and preferences in an environment where this dualism is not obvious. This insight can be used to generate results by importing findings from the existing literature on preference orderings.

Keywords: Minimax regret; Ambiguity; Ambiguity aversion; Multiple priors; Choice correspondences (search for similar items in EconPapers)
JEL-codes: C44 D81 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:146:y:2011:i:6:p:2226-2251

DOI: 10.1016/j.jet.2011.10.004

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