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Preferences with grades of indecisiveness

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  • Minardi, Stefania
  • Savochkin, Andrei

Abstract

Departing from the traditional approach of modeling indecisiveness based on the weakening of the completeness axiom, we introduce the notion of graded preferences: The agent is characterized by a binary relation over (ordered) pairs of alternatives, which allows her to express her inclination to prefer one alternative over another and her confidence in the relative superiority of the indicated alternative. In the classical Anscombe–Aumann framework, we derive a representation of a graded preference by a measure of the set of beliefs that rank one option better than the other. Our model is a refinement of Bewley's [6] model of Knightian uncertainty: It is based on the same object of representation — the set of beliefs — but provides more information about how the agent compares alternatives.

Suggested Citation

  • Minardi, Stefania & Savochkin, Andrei, 2015. "Preferences with grades of indecisiveness," Journal of Economic Theory, Elsevier, vol. 155(C), pages 300-331.
  • Handle: RePEc:eee:jetheo:v:155:y:2015:i:c:p:300-331
    DOI: 10.1016/j.jet.2014.11.009
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    References listed on IDEAS

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    Cited by:

    1. Minardi, Stefania & Savochkin, Andrei, 2015. "Preferences with grades of indecisiveness," Journal of Economic Theory, Elsevier, vol. 155(C), pages 300-331.
    2. McClellon, Morgan, 2016. "Confidence models of incomplete preferences," Mathematical Social Sciences, Elsevier, vol. 83(C), pages 30-34.
    3. Karni, Edi & Safra, Zvi, 2016. "A theory of stochastic choice under uncertainty," Journal of Mathematical Economics, Elsevier, vol. 63(C), pages 164-173.
    4. Miguel Costa-Gomes & Carlos Cueva & Georgios Gerasimou & Matus Tejiscak, 2014. "Choice, Deferral and Consistency," Discussion Paper Series, Department of Economics 201416, Department of Economics, University of St. Andrews, revised 26 Dec 2016.
    5. Hill, Brian, 2016. "Incomplete preferences and confidence," Journal of Mathematical Economics, Elsevier, vol. 65(C), pages 83-103.
    6. Costa-Gomes, Miguel & Cueva, Carlos & Gerasimou, Georgios, 2014. "Choice, Deferral and Consistency," SIRE Discussion Papers 2015-17, Scottish Institute for Research in Economics (SIRE).

    More about this item

    Keywords

    Incomplete preferences; Knightian uncertainty; Graded preferences; Confidence; Decisiveness;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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