A subjective spin on roulette wheels
Paolo Ghirardato (),
Massimo Marinacci and
ICER Working Papers - Applied Mathematics Series from ICER - International Centre for Economic Research
We provide a behavioral foundation to the notion of ‘mixture’ of acts, which is used to great advantage in he decision setting introduced by Anscombe and Aumann. Our construction allows one to formulate mixture-space axioms even in a fully sub-jective setting, without assuming the existence of randomizing devices. This simplifies the task of developing axiomatic models which only use behavioral data. Moreover, it is immune from the difficulty that agents may ‘distort’ the probabilities associated with randomizing devices. For illustration, we present simple subjective axiomatizations of some models of choice under uncertainty, including the maxmin expected utility model of Gilboa and Schmeidler, and Bewley’s model of choice with incomplete preferences.
Pages: 28 pages
Date: 2001-06, Revised 2001-08
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Journal Article: A Subjective Spin on Roulette Wheels (2003)
Working Paper: A Subjective Spin on Roulette Wheels (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:icr:wpmath:17-2001
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