Decision Uncertainty from Strict Preferences in Sequential Search Scenarios with Multiple Criteria

Debora Di Caprio, Yolanda Durán Durán and Francisco Javier Santos-Arteaga ()
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Debora Di Caprio: Department of Economics and Management, University of Trento, 38122 Trento, Italy
Yolanda Durán Durán: Departamento de Economía Financiera y Actuarial y Estadística, Universidad Complutense de Madrid, 28003 Madrid, Spain
Francisco Javier Santos-Arteaga: Departamento de Economía Financiera y Actuarial y Estadística, Universidad Complutense de Madrid, 28003 Madrid, Spain

Mathematics, 2025, vol. 13, issue 9, 1-13

Abstract: The standard expected utility model applied by economists and decision scientists assumes both that decision makers (DMs) are rational and that their information retrieval behavior and choices are determined by the observed and potential values of the multiple characteristics defining the alternatives. In this regard, if DMs can formalize the information acquisition structures determined by the main postulates of expected utility theory, they should also be able to perform standard operations regarding the potential combinatorial outcomes that may be obtained when evaluating the alternatives. We define an information retrieval scenario where DMs account for the different combinatorial possibilities arising among the realizations of the characteristics defining the alternatives before evaluating them. We demonstrate the indifference that arises among risk-neutral DMs endowed with standard expected utilities within sequential information acquisition environments such as those defined by online search engines. We also illustrate the reticence of DMs to acquire information on new alternatives when increasing their aversion to risk or modifying the relative importance assigned to the different characteristics defining the alternatives. The main strategic consequences that follow from the enhanced information retrieval scenario proposed are also analyzed.

Keywords: multi-attribute sequential search; uncertainty; expected utility; indifference; risk attitude (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2025
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