A decision-maker exhibits preference for flexibility if he prefers any set of alternatives to its subsets. Desire for flexibility can be explained by a two-stage process, where the agent must first preselect a subset of alternatives from which he has to make a final choice later on. We assume: (1) the agent attaches a subjective probability to the survival of each subset of alternatives, and (2) the agent makes a best choice out of any set which becomes available, and ranks sets ex-ante in terms of the expected utility of the best choices within them.We prove that any total ordering respecting set inclusion is rationalizable in these terms. However, without further restrictions on the admissible distributions of survival probabilities, the underlying utilities can be arbitrary. Hence we assume that the survival probabilities of individual alternatives are independently distributed. We prove that this reduces significantly the class of set rankings, which can be rationalized.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number
02-22.
Length: 16 pages Date of creation: Nov 2002 Date of revision: Handle: RePEc:kud:kuiedp:0222
Contact details of provider: Postal: Øster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark Phone: (+45) 35 32 26 26 Fax: +45 35 32 30 00 Web page: http://www.econ.ku.dk More information through EDIRC
Order Information: Email:
For technical questions regarding this item, or to correct its listing, contact: (Henriette Aabo Hansen).
References listed on IDEAS 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.:
Barbera, S. & Bossert, W. & Pattanaik, P.K., 2001.
"Ranking Sets of Objects,"
Cahiers de recherche
2001-02, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
Other versions:
BARBERA, Salvador & BOSSERT, Walter & PATTANAIK, Prasanta K., 2001.
"Ranking Sets of Objects,"
Cahiers de recherche
2001-02, Universite de Montreal, Departement de sciences economiques.
[Downloadable!]
Cited by: (explanations, 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.)