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Choice theory when agents can randomize

Listed author(s):
  • Stoye, Jörg

This paper takes choice theory to risk or uncertainty. Well-known decision models are axiomatized under the premise that agents can randomize. Under a reversal of order assumption, this convexifies choice sets, and even after imposing the weak axiom of revealed preference and nonemptiness of choice correspondences, the preferences directly revealed by choice may be incomplete or cyclical.

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File URL: http://www.sciencedirect.com/science/article/pii/S0022053114001707
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Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 155 (2015)
Issue (Month): C ()
Pages: 131-151

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Handle: RePEc:eee:jetheo:v:155:y:2015:i:c:p:131-151
DOI: 10.1016/j.jet.2014.11.011
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622869

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  16. Michael Birnbaum & Ulrich Schmidt, 2010. "Testing transitivity in choice under risk," Theory and Decision, Springer, vol. 69(4), pages 599-614, October.
  17. Eddie Dekel & Barton L Lipman & Aldo Rustichini & Todd Sarver, 2007. "Representing Preferences with a Unique Subjective State Space: A Corrigendum -super-1," Econometrica, Econometric Society, vol. 75(2), pages 591-600, March.
  18. Sen, Amartya K, 1973. "Behaviour and the Concept of Preference," Economica, London School of Economics and Political Science, vol. 40(159), pages 241-259, August.
  19. Fishburn, Peter C & LaValle, Irving H, 1988. "Context-Dependent Choice with Nonlinear and Nontransitive Preferences," Econometrica, Econometric Society, vol. 56(5), pages 1221-1239, September.
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  23. Michael Birnbaum & Ulrich Schmidt, 2008. "An experimental investigation of violations of transitivity in choice under uncertainty," Journal of Risk and Uncertainty, Springer, vol. 37(1), pages 77-91, August.
  24. Caplin, Andrew & Dean, Mark, 2011. "Search, choice, and revealed preference," Theoretical Economics, Econometric Society, vol. 6(1), January.
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  26. Schmeidler, David, 1989. "Subjective Probability and Expected Utility without Additivity," Econometrica, Econometric Society, vol. 57(3), pages 571-587, May.
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  28. Camerer, Colin F, 1989. "An Experimental Test of Several Generalized Utility Theories," Journal of Risk and Uncertainty, Springer, vol. 2(1), pages 61-104, April.
  29. Tsogbadral Galaabaatar & Edi Karni, 2013. "Subjective Expected Utility With Incomplete Preferences," Econometrica, Econometric Society, vol. 81(1), pages 255-284, January.
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