Other-Regarding Preferences, Concerns for Others Opportunities and Violations of Stochastic Dominance—A Choice Theoretic Analysis

Abhinash Borah

No 1204, Working Papers from Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz

Abstract: Decision makers with other-regarding preferences may care not just about others’ ex-post outcomes but also about their ex-ante opportunities. In environments of risk, so doing may lead to violations of the property of stochastic dominance that is at the heart of existing theories of decision making under risk, expected utility and non-expected utility alike. We propose choice theoretic foundations for a decision model of otherregarding preferences that accommodates such violations. Our decision model provides a representation of a decision maker’s preferences over lotteries on an allocation-space that is based on (i) a baseline expected utility evaluation and (ii) an adjustment that corrects the expected utility evaluation to account for the decision maker’s concerns about others’ overall opportunities under a lottery.

Pages: 46 pages
Date: 2012-01-17
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https://download.uni-mainz.de/RePEc/pdf/Discussion_Paper_1204.pdf First version, 2012 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:jgu:wpaper:1204

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