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Difficult Decisions

Yoram Halevy, David Walker-Jones and Lanny Zrill

Working Papers from University of Toronto, Department of Economics

Abstract: We investigate the problem of identifying incomplete preferences in the domain of uncertainty by proposing an incentive-compatible mechanism that bounds the behavior that can be rationalized by very general classes of complete preferences. Hence, choices that do not abide by the bounds indicate that the decision maker cannot rank the alternatives. Data collected from an experiment that implements the proposed mechanism indicates that when choices cannot be rationalized by Subjective Expected Utility they are usually incompatible with general models of complete preferences. Moreover, behavior that is indicative of incomplete preferences is empirically associated with deliberate randomization.

Keywords: Incomplete Preferences; Identification; Elicitation; Choice Under Uncertainty; Deliberate Randomization; Experiment (search for similar items in EconPapers)
JEL-codes: C91 D01 D81 D9 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2023-07-25
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-mic and nep-upt
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