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Comparative Incompleteness: Measurement, Behavioral Manifestations and Elicitation

Author

Listed:
  • Edi Karni

    (Johns Hopkins University)

  • Marie-Louise Vierø

    (Department of Economics and Business Economics, Aarhus University)

Abstract

This paper introduces measures of overall incompleteness of preference relations under risk and uncertainty, as well as measures of incompleteness of beliefs and tastes. These measures are used to define 'more incomplete' than relations among different preference relations. We show how greater incompleteness is manifested in the representations of decision makers’ preferences and illustrate its behavioral implications in a simple portfolio choice problem. In addition, the paper introduces incentive compatible schemes of eliciting the degrees of overall incompleteness and those of beliefs and tastes.

Suggested Citation

  • Edi Karni & Marie-Louise Vierø, 2022. "Comparative Incompleteness: Measurement, Behavioral Manifestations and Elicitation," Economics Working Papers 2022-05, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2022-05
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    References listed on IDEAS

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    More about this item

    Keywords

    Incomplete preferences; Knightian uncertainty; Comparative incompleteness; Elicitation mechanisms;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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