Decision theory and the "almost implies near" phenomenon

Christopher Chambers and Federico Echenique

Papers from arXiv.org

Abstract: This paper explores relaxing behavioral axioms in decision theory. We demonstrate that when a preference approximately satisfies a key axiom (like independence or stationarity) its utility representation is close to a standard model. The degree of the axiom's violation quantitatively determines this proximity. Interestingly, we show that in some cases, a relaxed axiom, when combined with another property like homotheticity, still implies an exact representation. We establish these ``almost implies near'' results for choice under risk, uncertainty, and intertemporal choice, connecting axiomatic deviations to the notion of approximate optimization.

Date: 2025-02, Revised 2025-07
New Economics Papers: this item is included in nep-mic and nep-upt
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