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Lost in objective translation: Awareness of unawareness when unknowns are not simply unknowns

Marie-Louise Vierø ()
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Marie-Louise Vierø: Department of Economics and Business Economics, Aarhus University, Postal: Fuglesangs Alle 4, DK-8210 Aarhus V, Denmark

Authors registered in the RePEc Author Service: Marie-Louise Vierø

Economics Working Papers from Department of Economics and Business Economics, Aarhus University

Abstract: This paper models decision makers who are cognisant of their own potential unawareness and who may have an a priori sense that not all unknowns are equal. Karni and Vierø (2017) provide a choice theoretic model of growing awareness when the decision maker has awareness of her unawareness. Their framework, together with their axiomatic structure, results in all potential consequences that the decision maker is unaware of being treated identically from an a priori point of view. However, in the context of growing awareness, one can argue for differences in valuations a priori. Different types of surprises could be anticipated in different situations. This paper proposes a model that accommodates such a priori differences in anticipation. It allows for subjectively different unknowns and provides a representation of preferences that has an expected utility structure, but where the attitudes towards differently perceived unknowns are allowed to differ.

Keywords: Awareness; Unawareness; Unknown unknowns; Utility of indescribable consequences; Attitudes towards the unknown (search for similar items in EconPapers)
JEL-codes: D8 D81 D83 (search for similar items in EconPapers)
Pages: 25
Date: 2022-09-26
New Economics Papers: this item is included in nep-mic and nep-upt
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Handle: RePEc:aah:aarhec:2022-06