Ensemble Prospectism

Kim Kaivanto

No 144439430, Working Papers from Lancaster University Management School, Economics Department

Abstract: Incomplete preferences displaying ‘mildly sweetened’ structure are common, yet theoretically problematic. This paper examines the properties of the rankings induced by the set of all coherent completions of the mildly sweetened partial preference structure. Building on these properties, I propose an ensemble-based refinement of Hare’s (Analysis 70:237–247, 2010) prospectism criterion for rational choice when preferences are incomplete. Importantly, this ensemble-based refinement is immune to Peterson’s (Theory & Decision 78:451–456, 2015) weak money pump argument. Hence, ensemble prospectism ensures outcome rationality. Furthermore, by recognizing the structural isomorphism between mildly sweetened preference structures and Cover’s splitting rule in Blackwell’s Pick the Largest Number problem (Ann Math Stat 22:393–399, 1951), ensemble prospectism can be shown to yield better-than-even odds of selecting the expost higher-utility option – despite the absence of all-things-considered preferences ex ante.

Keywords: Prospectism; Refinement; Money pump; Outcome rationality; Ensemble method; Voting rules; Incomplete preferences; Mildly sweetened preferences; Cover rule; Hare; Peterson (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-upt
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Journal Article: Ensemble prospectism (2017)
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