Economics at your fingertips  

A general theory of subjective mixtures

Paolo Ghirardato and Daniele Pennesi ()

Journal of Economic Theory, 2020, vol. 188, issue C

Abstract: We provide, and characterize behaviorally, a framework for constructing subjective mixtures which requires neither the Certainty Independence nor the Monotonicity axiom, replacing them with much weaker “local” properties. As we also show by means of examples, this framework provides a purely subjective foundation to most of the recent preference models which employ the Anscombe-Aumann setting. It also allows a subjective formulation of a preference for ambiguity hedging, and as a consequence allows the distinction of the notions of ambiguity aversion and preference for randomization.

Keywords: Subjective mixture space; Ambiguity aversion; Preference for randomization (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
Working Paper: A general theory of subjective mixtures (2020) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.jet.2020.105056

Access Statistics for this article

Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell

More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2024-05-07
Handle: RePEc:eee:jetheo:v:188:y:2020:i:c:s0022053120300545