Hypothetical Expected Utility

Evan Piermont ()

Papers from arXiv.org

Abstract: This paper provides a model to analyze and identify a decision maker's (DM's) hypothetical reasoning. Using this model, I show that a DM's propensity to engage in hypothetical thinking is captured exactly by her ability to recognize implications (i.e., to identify that one hypothesis implies another) and that this later relation is encoded by a DM's observable behavior. Thus, this characterization both provides a concrete definition of (flawed) hypothetical reasoning and, importantly, yields a methodology to identify these judgments from standard economic data.

Date: 2021-06, Revised 2021-07
New Economics Papers: this item is included in nep-cwa and nep-upt
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Citations: View citations in EconPapers (1)

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