Probabilistic sophistication and variational preferences
AbstractThis paper shows that in the class of variational preferences the notion of probabilistic sophistication is equivalent to expected utility as long as there exists at least one event such that the independence axiom holds for bets on that event. This extends the result of Marinacci (2002)  and provides a novel interpretation of his result.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Theory.
Volume (Year): 146 (2011)
Issue (Month): 5 (September)
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Web page: http://www.elsevier.com/locate/inca/622869
Ambiguity aversion Probabilistic sophistication Expected utility Variational preferences;
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