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Uniquely Representing "A Preference for Uniformity"

Author

Listed:
  • Chatterjee Kalyan

    (The Pennsylvania State University)

  • Krishna R. Vijay

    (University of North Carolina at Chapel Hill)

Abstract

In a model of decision making over sets of alternatives, we consider an agent who conceives of the different utilities she will receive (depending on the state of mind she is in, her subjective state) when she finally makes a choice from the set. Her uncertainty is described by multiple beliefs (or measures) over the state space. She is pessimistic about the true beliefs, and would like to hedge her bets. This results in her having a preference for uniformity of payoffs across the various subjective states. We present a utility representation for such agents and show that our representation provides a natural measure of the agent's desire for uniformity of payoffs in the subjective states. We also show that concerns for uniformity are orthogonal to concerns about flexibility or commitment. We achieve this by relaxing the Independence axiom as applied to our environment. However, this weakening of Independence means that in settings with temptation, we can no longer ensure the existence of a unique normative ranking.

Suggested Citation

  • Chatterjee Kalyan & Krishna R. Vijay, 2012. "Uniquely Representing "A Preference for Uniformity"," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 12(1), pages 1-36, January.
    • Handle: RePEc:bpj:bejtec:v:12:y:2012:i:1:n:1
    DOI: 10.2202/1935-1704.1807
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    References listed on IDEAS

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