Maxmin expected utility with additivity on unambiguous events

Xiangyu Qu

Journal of Mathematical Economics, 2013, vol. 49, issue 3, 245-249

Abstract: This paper provides a model of beliefs representation in which ambiguity and unambiguity are endogenously distinguished in the maxmin expected utility model of Gilboa and Schmeidler (1989). Specifically, I first extend it by getting a representation of beliefs such that the probabilistic beliefs over each ambiguous event are represented by a nondegenerate interval, while the ones over each unambiguous event are represented by a number. I then suggest a behavioral definition of ambiguity. It provides a choice theoretical foundation for the Knightian distinction between ambiguity and unambiguity.

Keywords: Maxmin expected utility; Ambiguity; Unambiguous events (search for similar items in EconPapers)
Date: 2013
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Working Paper: Maxmin expected utility with additivity on unambiguous events (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:49:y:2013:i:3:p:245-249

DOI: 10.1016/j.jmateco.2013.02.004

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