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Rank Dependent Weighted Average Utility Models for Decision Making under Ignorance or Objective Ambiguity

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Abstract

The paper provides an axiomatic characterization of a family of rank dependent weighted average utility criteria applicable to decisions under ignorance or objective ambiguity. A decision under ignorance is described by the finite set of its final consequences while a decision under objective ambiguity is described by a finite set of probability distributions over a set of final consequences. The criteria characterized are those that assign to every element in a set a weight that depends upon the rank of this element if it was available for sure (or non-ambiguously) and that compare sets on the basis of their weighted utility for some utility function. A specific subfamily of these criteria that requires the weights to be proportional to each other is also characterized.

Suggested Citation

  • Nicolas Gravel & Thierry Marchant, 2022. "Rank Dependent Weighted Average Utility Models for Decision Making under Ignorance or Objective Ambiguity," AMSE Working Papers 2223, Aix-Marseille School of Economics, France.
    • Handle: RePEc:aim:wpaimx:2223
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    References listed on IDEAS

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    More about this item

    Keywords

    ignorance; ambiguity; ranking sets; axioms; ranks; weights; utility;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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