EconPapers    
Economics at your fingertips  
 

Savage's Theorem Under Changing Awareness

Franz Dietrich

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: This paper proposes a simple unified framework of choice under changing awareness, addressing both outcome awareness and (nature) state awareness, and both how fine and how exhaustive the awareness is. Six axioms characterize an (essentially unique) expected-utility rationalization of preferences, in which utilities and probabilities are revised according to three revision rules when awareness changes: (R1) utilities of unaffected outcomes are transformed affinely; (R2) probabilities of unaffected events are transformed proportionally; (R3) enough probabilities ‘objectively' never change (they represent revealed objective risk). Savage's Theorem is a special case of the theorem, namely the special case of fixed awareness, in which our axioms reduce to Savage's axioms while R1 and R2 hold trivially and R3 reduces to Savage's requirement of atomless probabilities. Rule R2 parallels Karni and Viero's (2013) ‘reverse Bayesianism' and Ahn and Ergin's (2010) ‘partition-dependence'. The theorem draws mathematically on Kopylov (2007), Niiniluoto (1972) and Wakker (1981).

Date: 2018-07
New Economics Papers: this item is included in nep-mic and nep-upt
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01743898v1
References: Add references at CitEc
Citations: View citations in EconPapers (14)

Published in Journal of Economic Theory, 2018, 176, pp.1-54. ⟨10.1016/j.jet.2018.01.015⟩

Downloads: (external link)
https://shs.hal.science/halshs-01743898v1/document (application/pdf)

Related works:
Journal Article: Savage's theorem under changing awareness (2018) Downloads
Working Paper: Savage's Theorem Under Changing Awareness (2018) Downloads
Working Paper: Savage's Theorem Under Changing Awareness (2018) Downloads
Working Paper: Savage's Theorem Under Changing Awareness (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-01743898

DOI: 10.1016/j.jet.2018.01.015

Access Statistics for this paper

More papers in Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2025-03-22
Handle: RePEc:hal:cesptp:halshs-01743898