Robustifying the Classical Model of Risk Preferences and Beliefs
Mark Machina ()
University of California at San Diego, Economics Working Paper Series from Department of Economics, UC San Diego
Robustify. To identify the analytical aspects of a model that continue to hold under more genral conditions. This usually requires expressing the model and its results in a particular manner as statements that may be logically equivalent under the assumptions of a given model can differ widely in their robustness to dropping these assumptions. E.g., "By expressing the classical expected utility/subjective probability model in event-theoretic therms, tis asic concepts, tools and results can be locally and globally robustified to general 'event-smooth' preferences over subjectively uncertain acts that do not necessarily exhibit either expected utility risk preferences or probabilistic beliefs."
Keywords: Risk (search for similar items in EconPapers)
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