Rank Dependent Weighted Average Utility Models for Decision Making under Ignorance or Objective Ambiguity

Nicolas Gravel () and Thierry Marchant

No 2223, AMSE Working Papers from Aix-Marseille School of Economics, France

Abstract: The paper provides an axiomatic characterization of a family of rank dependent weighted average utility criteria applicable to decisions under ignorance or objective ambiguity. A decision under ignorance is described by the finite set of its final consequences while a decision under objective ambiguity is described by a finite set of probability distributions over a set of final consequences. The criteria characterized are those that assign to every element in a set a weight that depends upon the rank of this element if it was available for sure (or non-ambiguously) and that compare sets on the basis of their weighted utility for some utility function. A specific subfamily of these criteria that requires the weights to be proportional to each other is also characterized.

Keywords: ignorance; ambiguity; ranking sets; axioms; ranks; weights; utility (search for similar items in EconPapers)
JEL-codes: D80 D81 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2022-10
New Economics Papers: this item is included in nep-upt
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Working Paper: Rank Dependent Weighted Average Utility Models for Decision Making under Ignorance or Objective Ambiguity (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:aim:wpaimx:2223

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