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Ensemble prospectism

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  • Kim Kaivanto

    (Lancaster University)

Abstract

Incomplete preferences displaying ‘mildly sweetened’ structure are common, yet theoretically problematic. This paper examines the properties of the rankings induced by the set of all coherent completions of the mildly sweetened partial preference structure. Building on these properties, I propose an ensemble-based refinement of Hare’s (Analysis 70:237–247, 2010) prospectism criterion for rational choice when preferences are incomplete. Importantly, this ensemble-based refinement is immune to Peterson’s (Theory and Decision 78:451–456, 2015) weak money pump argument. Hence, ensemble prospectism ensures outcome rationality. Furthermore, by recognizing the structural isomorphism between mildly sweetened preference structures and Cover’s splitting rule in Blackwell’s Pick the Largest Number problem (Ann Math Stat 22:393–399, 1951), ensemble prospectism can be shown to yield better-than-even odds of selecting the ex-post higher utility option—despite the absence of all-things-considered preferences ex ante.

Suggested Citation

  • Kim Kaivanto, 2017. "Ensemble prospectism," Theory and Decision, Springer, vol. 83(4), pages 535-546, December.
    • Handle: RePEc:kap:theord:v:83:y:2017:i:4:d:10.1007_s11238-017-9622-z
    DOI: 10.1007/s11238-017-9622-z
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    References listed on IDEAS

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    3. Mandler, Michael, 2005. "Incomplete preferences and rational intransitivity of choice," Games and Economic Behavior, Elsevier, vol. 50(2), pages 255-277, February.
    4. 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.
    5. Michael Mandler, 2004. "Status quo maintenance reconsidered: changing or incomplete preferences?," Economic Journal, Royal Economic Society, vol. 114(499), pages 518-535, November.
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    More about this item

    Keywords

    Prospectism; Refinement; Money pump; Outcome rationality; Ensemble method; Voting rules; Incomplete preferences; Mildly sweetened preferences; Cover rule; Hare; Peterson;
    All these keywords.

    JEL classification:

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

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