Advanced Search
MyIDEAS: Login to save this paper or follow this series

Conditioning and Aggregation of Preferences

Contents:

Author Info

  • Costis Skiadas
Registered author(s):

    Abstract

    This paper contains a formulation of conditional preferences and their aggregation across states of nature and time that is consistent with, but does not imply, an expected utility representation of preferences, state-independence, or consequentialism. Under weak consistency conditions, the conditional utility of an act given certain information is related to the conditional utility of the same act given some coarser information through a (not necessarily additive) map, called an "aggregator." Sufficient conditions for additive aggregation are developed, based on standard theory of additive conjoint measurement. In an temporal setting, a "tie-coherence" axiom links conditional utilities and aggregators across time, providing the foundation for various forms of recursive utility. The general theory of conditioning and aggregation of preferences is applied to derive additive and recursive utility representations of preferences for information. The associated concept of information affinity (or aversion) is defined and related to recursive utility.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. 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.
    File URL: http://www.kellogg.northwestern.edu/research/math/papers/1010.pdf
    File Function: main text
    Download Restriction: no

    Bibliographic Info

    Paper provided by Northwestern University, Center for Mathematical Studies in Economics and Management Science in its series Discussion Papers with number 1010.

    as in new window
    Length:
    Date of creation: Feb 1991
    Date of revision:
    Handle: RePEc:nwu:cmsems:1010

    Contact details of provider:
    Postal: Center for Mathematical Studies in Economics and Management Science, Northwestern University, 580 Jacobs Center, 2001 Sheridan Road, Evanston, IL 60208-2014
    Phone: 847/491-3527
    Fax: 847/491-2530
    Email:
    Web page: http://www.kellogg.northwestern.edu/research/math/
    More information through EDIRC

    Order Information:
    Email:

    Related research

    Keywords:

    References

    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.:
    as in new window
    1. Allen, Beth, 1983. "Neighboring information and distributions of agents' characteristics under uncertainty," Journal of Mathematical Economics, Elsevier, vol. 12(1), pages 63-101, September.
    2. Itzhak Gilboa & Ehud Lehrer, 1989. "The Value of Information -- An Axiomatic Approach," Discussion Papers 835, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    3. Hammond, Peter J, 1989. "Consistent Plans, Consequentialism, and Expected Utility," Econometrica, Econometric Society, vol. 57(6), pages 1445-49, November.
    4. Karni, Edi & Schmeidler, David, 1991. "Utility theory with uncertainty," Handbook of Mathematical Economics, in: W. Hildenbrand & H. Sonnenschein (ed.), Handbook of Mathematical Economics, edition 1, volume 4, chapter 33, pages 1763-1831 Elsevier.
    5. David Schmeidler, 1989. "Subjective Probability and Expected Utility without Additivity," Levine's Working Paper Archive 7662, David K. Levine.
    6. Karni Edi, 1993. "Subjective Expected Utility Theory with State-Dependent Preferences," Journal of Economic Theory, Elsevier, vol. 60(2), pages 428-438, August.
    7. Karni, Edi, 1993. "A Definition of Subjective Probabilities with State-Dependent Preferences," Econometrica, Econometric Society, vol. 61(1), pages 187-98, January.
    8. Cotter, Kevin D., 1986. "Similarity of information and behavior with a pointwise convergence topology," Journal of Mathematical Economics, Elsevier, vol. 15(1), pages 25-38, February.
    9. Camerer, Colin & Weber, Martin, 1992. " Recent Developments in Modeling Preferences: Uncertainty and Ambiguity," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 325-70, October.
    10. Chateauneuf, Alain & Wakker, Peter, 1993. "From local to global additive representation," Journal of Mathematical Economics, Elsevier, vol. 22(6), pages 523-545.
    11. Kreps, David M, 1979. "A Representation Theorem for "Preference for Flexibility"," Econometrica, Econometric Society, vol. 47(3), pages 565-77, May.
    12. David M Kreps & Evan L Porteus, 1978. "Temporal Resolution of Uncertainty and Dynamic Choice Theory," Levine's Working Paper Archive 625018000000000009, David K. Levine.
    13. Loomes, Graham & Sugden, Robert, 1986. "Disappointment and Dynamic Consistency in Choice under Uncertainty," Review of Economic Studies, Wiley Blackwell, vol. 53(2), pages 271-82, April.
    14. Machina, Mark J, 1989. "Dynamic Consistency and Non-expected Utility Models of Choice under Uncertainty," Journal of Economic Literature, American Economic Association, vol. 27(4), pages 1622-68, December.
    15. Dekel, Eddie, 1986. "An axiomatic characterization of preferences under uncertainty: Weakening the independence axiom," Journal of Economic Theory, Elsevier, vol. 40(2), pages 304-318, December.
    16. Berliant, Marcus C, 1986. "A Utility Representation for a Preference Relation on a s-Algebra," Econometrica, Econometric Society, vol. 54(2), pages 359-62, March.
    17. Gilboa, Itzhak & Schmeidler, David, 1989. "Maxmin expected utility with non-unique prior," Journal of Mathematical Economics, Elsevier, vol. 18(2), pages 141-153, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. DREZE, Jacques H. & RUSTICHINI, Aldo, 1995. "Moral Hazard and Conditional Preferences," CORE Discussion Papers 1995010, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:nwu:cmsems:1010. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fran Walker).

    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.