AbstractTo achieve robustness, a decision criterion that recently has been widely adopted is Wald's minimax, after Gilboa and Schmeidler (1989) showed that (one generalisation of) it can be given an axiomatic foundation with a behavioural interpretation. Yet minimax has known drawbacks. A better alternative is Savage's minimax regret, recently axiomatized by Stoye (2006). A related alternative is relative minimax, known as competitive ratio in the computer science literature, which is appealingly unit free. This paper provides an axiomatisation with behavioural content for relative minimax.
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Bibliographic InfoPaper provided by Einaudi Institute for Economics and Finance (EIEF) in its series EIEF Working Papers Series with number 0804.
Length: 46 pages
Date of creation: 2008
Date of revision: May 2008
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-21 (All new papers)
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