Understanding the nonadditive probability decision model (*)
AbstractThe pioneering research of Schmeidler   and others identified behavioral axioms that underlie preferences consistent with the maximization of Choquet expected utility. However, these theories do not clarify the link between the epistemics of the decision maker's (DM) problem and his choice. This paper shows that if the DM is aware that his anticipation and perception of future contingencies is incomplete, then his subjective beliefs will be described by a nonadditive probability specification. Further, if the DM acts with a certain notion of caution given the incompleteness in his understanding of the environment, his preferences over acts may have a Choquet expected utility representation. The model developed here thus provides a justification of such beliefs and preferences based on "procedural rationality". The formalism also allows a simple characterization of how belief representation may change as the DM acquires a clearer picture of the contingency space underlying the uncertain environment.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 9 (1996)
Issue (Month): 1 ()
Note: Received: April 6, 1995; revised version November 27, 1995
Contact details of provider:
Web page: http://link.springer.de/link/service/journals/00199/index.htm
Other versions of this item:
- Mukerji, S., 1995. "Understanding the nonadditive probability decision model," Discussion Paper Series In Economics And Econometrics 9517, Economics Division, School of Social Sciences, University of Southampton.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Welfe, Aleksander, 1996. " The Price-Wage Inflationary Spiral in Poland," Economic Change and Restructuring, Springer, vol. 29(1), pages 33-50.
- Roberto Golinelli & Renzo Orsi, 1994.
"Price-Wage Dynamics is A Transition Economy: The Case of Poland,"
192, Dipartimento Scienze Economiche, Universita' di Bologna.
- Golinelli, Roberto & Orsi, Renzo, 1994. " Price-Wage Dynamics in a Transition Economy: The Case of Poland," Economic Change and Restructuring, Springer, vol. 27(3), pages 293-313.
- Clements, Michael P. & Mizon, Grayham E., 1991. "Empirical analysis of macroeconomic time series : VAR and structural models," European Economic Review, Elsevier, vol. 35(4), pages 887-917, May.
- Golinelli, Roberto & Orsi, Renzo, 1998.
" Exchange Rate, Inflation and Unemployment in East European Economies: The Case of Poland and Hungary,"
Economic Change and Restructuring,
Springer, vol. 31(1), pages 29-55.
- Roberto Golinelli & Renzo Orsi, . "Exchange Rate, Inflation and Unemployment in East European Economies: the Case of Poland and Hungary," Ace Project Memoranda 96/11, Department of Economics, University of Leicester.
- Roberto Golinelli & Renzo Orsi, 1996. "Exchange rate Inflation and Unemployment in East European Economies: the Case of Poland and Hungary," Working Papers 265, Dipartimento Scienze Economiche, Universita' di Bologna.
- Christopher Erickson & Andrea Ichino, 1995.
"Wage Differentials in Italy: Market Forces, Institutions, and Inflation,"
in: Differences and Changes in Wage Structures, pages 265-306
National Bureau of Economic Research, Inc.
- Christopher L. Erikson & Andrea Ichino, 1994. "Wage Differentials in Italy: Market Forces, Institutions, and Inflation," NBER Working Papers 4922, National Bureau of Economic Research, Inc.
- Hansen, Bruce E., 1992.
"Testing for parameter instability in linear models,"
Journal of Policy Modeling,
Elsevier, vol. 14(4), pages 517-533, August.
- Tom Doan, . "STABTEST: RATS procedure to perform Hansen's stability test for OLS," Statistical Software Components RTS00199, Boston College Department of Economics.
- Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
- Welfe, Aleksander, 1991. " Modelling Wages in Centrally Planned Economies: The Case of Poland," Economic Change and Restructuring, Springer, vol. 24(1), pages 47-58.
- Doornik, Jurgen A & Hendry, David F & Nielsen, Bent, 1998.
" Inference in Cointegrating Models: UK M1 Revisited,"
Journal of Economic Surveys,
Wiley Blackwell, vol. 12(5), pages 533-72, December.
- Jurgen A. Doornik & David F. Hendry & Bent Nielsen, 1998. "Inference in Cointegrating Models: UK M1 Revisited," Journal of Economic Surveys, Wiley Blackwell, vol. 12(5), pages 533-572, December.
- Johansen, Soren, 1992.
"Determination of Cointegration Rank in the Presence of a Linear Trend,"
Oxford Bulletin of Economics and Statistics,
Department of Economics, University of Oxford, vol. 54(3), pages 383-97, August.
- Johansen, S., 1991. "Determination of Cointegration Rank in the Presence of a Linear Trend," Papers 76a, Helsinki - Department of Economics.
- Banerjee, Anindya & Dolado, Juan J. & Galbraith, John W. & Hendry, David, 1993. "Co-integration, Error Correction, and the Econometric Analysis of Non-Stationary Data," OUP Catalogue, Oxford University Press, number 9780198288107.
- repec:sae:niesru:v:111:y::i:1:p:62-85 is not listed on IDEAS
- Eichberger, J. & Kelsey, D., 1996.
"E-Capacities and the Ellsberg Paradox,"
96-13, Department of Economics, University of Birmingham.
- Mukerji, Sujoy & Tallon, Jean-Marc, 2004.
"Ambiguity aversion and the absence of wage indexation,"
Journal of Monetary Economics,
Elsevier, vol. 51(3), pages 653-670, April.
- Jean-Marc Tallon & Sujoy Mukerji, 2004. "Ambiguity aversion and the absence of wage indexation," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00174562, HAL.
- Sujoy Mukerji & Jean-Marc Tallon, 2002. "Ambiguity Aversion and the Absence of Wage Indexation," Economics Series Working Papers 111, University of Oxford, Department of Economics.
- MacLaren, D., 1995.
"Uncertainty AVersion and Technical Barriers to Trade: An Australian Example,"
Department of Economics - Working Papers Series
498, The University of Melbourne.
- MacLaren, Donald, 1997. "Uncertainty Aversion and Technical Barriers to Trade: An Australian Example," 1995: Understanding Technical Barriers to Agricultural Trade Conference, December 1995, Tucson, Arizona 51388, International Agricultural Trade Research Consortium.
- Marcello Basili & Carlo Zappia, 2010.
"Ambiguity and uncertainty in Ellsberg and Shackle,"
Cambridge Journal of Economics,
Oxford University Press, vol. 34(3), pages 449-474.
- Marie-Louise Vierø, 2009. "Exactly what happens after the Anscombe–Aumann race?," Economic Theory, Springer, vol. 41(2), pages 175-212, November.
- Nabil I. Al-Najjar & Luciano De Castro, 2010. "Uncertainty, Efficiency and Incentive Compatibility," Discussion Papers 1532, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Larry G. Epstein & Massimo Marinacci & Seo Kyoungwon, 2006.
Carlo Alberto Notebooks
4, Collegio Carlo Alberto, revised 2007.
- Vassili Vergopoulos, 2011. "Dynamic consistency for non-expected utility preferences," Economic Theory, Springer, vol. 48(2), pages 493-518, October.
- Adriana Castaldo & Massimo Marinacci, 2001. "Random correspndences as bundles of random variables," ICER Working Papers - Applied Mathematics Series 12-2001, ICER - International Centre for Economic Research.
- Alain Chateauneuf & Rose Anne Dana & Jean-Marc Tallon, 2000.
"Optimal risk-sharing rules and equilibria with Choquet-expected-utility,"
UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers)
- Chateauneuf, Alain & Dana, Rose-Anne & Tallon, Jean-Marc, 2000. "Optimal risk-sharing rules and equilibria with Choquet-expected-utility," Journal of Mathematical Economics, Elsevier, vol. 34(2), pages 191-214, October.
- Tallon, Jean-Marc & Dana, Rose-Anne & Chateauneuf, Alain, 2000. "Optimal risk-sharing rules and equilibria with Choquet-expected-utility," Economics Papers from University Paris Dauphine 123456789/5461, Paris Dauphine University.
- Grant, S. & Quiggin, J., 2001. "A Model-Free Definition of Increasing Uncertainty," Discussion Paper 2001-84, Tilburg University, Center for Economic Research.
- Spyros Galanis, 2013.
"Unawareness of theorems,"
Springer, vol. 52(1), pages 41-73, January.
- Galanis, Spyros, 2007. "Unawareness of theorems," Discussion Paper Series In Economics And Econometrics 51816, Economics Division, School of Social Sciences, University of Southampton.
- Roman Kozhan, 2011. "Non-additive anonymous games," International Journal of Game Theory, Springer, vol. 40(2), pages 215-230, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.