Preference for flexibility and the opportunities of choice
AbstractA decision-maker exhibits preference for flexibility if he always prefers any set of alternatives to its subsets, even when two of them contain the same best element. Desire for flexibility can be explained as the consequence of the agent’s uncertainty along a two-stage process, where he must first preselect a subset of alternatives from which to make a final choice later on. We investigate conditions on the rankings of subsets that are compatible with the following assumptions: (1) the agent is endowed with a VN-M utility function on alternatives, (2) the agent attaches a subjective probability to the survival of each subset of alternatives, and (3) the agent will make a best choice out of any set which becomes available, and ranks sets ex-ante in terms of the expected utility of the best surviving alternatives within them.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Mathematical Economics.
Volume (Year): 47 (2011)
Issue (Month): 3 ()
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Web page: http://www.elsevier.com/locate/jmateco
Flexibility; Preferences; Uncertainity;
Other versions of this item:
- Salvador Barberà & Birgit Grodal, 2002. "Preference for Flexibility and the Opportunities of Choice," Discussion Papers 02-22, University of Copenhagen. Department of Economics.
- Salvador Barberà & Birgit Grodal, 2003. "Preference for Flexibility and the Opportunities of Choice," UFAE and IAE Working Papers 598.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Salvador Barberà & Birgit Grodal, 2003. "Preference for Flexibility and the Opportunities of Choice," Working Papers 2, Barcelona Graduate School of Economics.
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