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Justifiable preferences

  • Lehrer, Ehud
  • Teper, Roee

We characterize preferences over acts that can be represented by a utility function and a multiple-prior, such that an act f is preferred to act g if there is a prior under which the expected utility induced by f is higher than that induced by g. These preferences are referred to as justifiable preferences. We further introduce a generalized model of ambiguity that involves a collection of multiple-priors, namely, multiple multiple-priors and incorporate Bewley[modifier letter apostrophe]s Knightian model in justifiability: f is preferred to g if, according to at least one set of priors, f is unanimously preferred to g.

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Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 146 (2011)
Issue (Month): 2 (March)
Pages: 762-774

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Handle: RePEc:eee:jetheo:v:146:y:2011:i:2:p:762-774
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