Evaluating Opportunities When People are Uncertainty Averse
We consider the problem of ranking sets of alternatives. Standard approaches to this problem regard the addition of an alternative to a set containing one element as enhancing choice. We argue that this monotonicity axiom may not be desirable when an agent is uncertain as to the value of this additional alternative. We replace monotonicity with an uncertainty aversion axiom, and also introduce an axiom that produces lexicographic behaviour. These axioms, in conjunction with an independence axiom, enable us to prove a characterisation theorem. This theorem says that sets are ranked in terms of the number of uncertain elements that they contain, the fewer the better. This is the only ranking rule that satisfies our axioms.
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.:
- Klaus Nehring & Clemens Puppe, 1999.
"On the multi-preference approach to evaluating opportunities,"
Social Choice and Welfare,
Springer;The Society for Social Choice and Welfare, vol. 16(1), pages 41-63.
- Klaus Nehring & Clemens Puppe, "undated". "On The Multi-Preference Approach To Evaluating Opportunities," Department of Economics 97-07, California Davis - Department of Economics.
- Klaus Nehring & Clemens Puppe & James D. Hamilton, 2003. "On The Multi-Preference Approach To Evaluating Opportunities," Working Papers 977, University of California, Davis, Department of Economics.
- Gekker, Ruvin & van Hees, Martin, 2006. "Freedom, opportunity and uncertainty: A logical approach," Journal of Economic Theory, Elsevier, vol. 130(1), pages 246-263, September.
- Puppe, Clemens, 1996. "An Axiomatic Approach to "Preference for Freedom of Choice"," Journal of Economic Theory, Elsevier, vol. 68(1), pages 174-199, January.
- 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.
- BARBERA, Salvador & BOSSERT, Walter & PATTANAIK, Prasanta K., 2001. "Ranking Sets of Objects," Cahiers de recherche 2001-02, Universite de Montreal, Departement de sciences economiques.
- Sebastiano Bavetta & Vitorocco Peragine, 2006. "Measuring autonomy freedom," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 26(1), pages 31-45, January.
- Pattanaik, Prasanta K. & Xu, Yongsheng, 2000. "On diversity and freedom of choice," Mathematical Social Sciences, Elsevier, vol. 40(2), pages 123-130, September.
- Prasanta K. Pattanaik & Yongsheng Xu,, "undated". "On Diversity and Freedom of Choice," Discussion Papers 97/18, University of Nottingham, School of Economics.
- Sen, Amartya, 1991. "Welfare, preference and freedom," Journal of Econometrics, Elsevier, vol. 50(1-2), pages 15-29, October.
- Antonio Romero-Medina, 2001. "More on preference and freedom," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(1), pages 179-191.
When requesting a correction, please mention this item's handle: RePEc:eso:journl:v:40:y:2009:i:1:p:109-116. 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: (Martina Lawless)
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.