Awareness-dependent subjective expected utility

Burkhard Schipper

International Journal of Game Theory, 2013, vol. 42, issue 3, 725-753

Abstract: We develop awareness-dependent subjective expected utility by taking unawareness structures introduced in Heifetz et al. (J Econ Theory 130:78–94, 2006 ; Games Econ Behav 62:304–324, 2008 ; Unawareness, beliefs, and speculative trade. University of California, Davis, 2011a ) as primitives in the Anscombe–Aumann approach to subjective expected utility. We observe that a decision maker is unaware of an event if and only if her choices reveal that the event is “null” and the negation of the event is “null”. Moreover, we characterize “impersonal” expected utility that is behaviorally indistinguishable from awareness-dependent subject expected utility and assigns probability zero to some subsets of states that are not necessarily events. We discuss in what sense probability zero can model unawareness. Copyright Springer-Verlag 2013

Keywords: Unawareness; Awareness; Unforeseen contingencies; Null; Probability zero; Subjective expected utility; Anscombe–Aumann; Small worlds; C70; C72; D03; D80; D81 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (36)

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Working Paper: Awareness-Dependent Subjective Expected Utility (2011)
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DOI: 10.1007/s00182-012-0321-2

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