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A note on consequentialism in a dynamic Savage framework: a comment on Ghirardato (2002)

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  • Joachim Hubmer

    (Yale University)

  • Franz Ostrizek

    (Institute for Advanced Studies)

Abstract

The relationship between subjective expected utility with Bayesian updating and dynamic properties of choice has been formalized in Ghirardato (Econ Theory 83–92, 2002). In such a setup, with preferences defined over functions from states to consequences as in Savage (The foundation of statistics, 1954), strong dynamic consistency implies consequentialism. More precisely, we show that Axiom 7 in Ghirardato (Econ Theory 83–92, 2002). is redundant or alternatively dynamic consistency can be weakened while retaining the results.

Suggested Citation

  • Joachim Hubmer & Franz Ostrizek, 2015. "A note on consequentialism in a dynamic Savage framework: a comment on Ghirardato (2002)," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 3(2), pages 265-269, October.
    • Handle: RePEc:spr:etbull:v:3:y:2015:i:2:d:10.1007_s40505-014-0057-1
    DOI: 10.1007/s40505-014-0057-1
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    References listed on IDEAS

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    1. Machina, Mark J, 1989. "Dynamic Consistency and Non-expected Utility Models of Choice under Uncertainty," Journal of Economic Literature, American Economic Association, vol. 27(4), pages 1622-1668, December.
    2. Paolo Ghirardato, 2002. "Revisiting Savage in a conditional world," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 20(1), pages 83-92.
    3. ,, 2011. "Dynamic choice under ambiguity," Theoretical Economics, Econometric Society, vol. 6(3), September.
    4. Epstein Larry G. & Le Breton Michel, 1993. "Dynamically Consistent Beliefs Must Be Bayesian," Journal of Economic Theory, Elsevier, vol. 61(1), pages 1-22, October.
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    Cited by:

    1. Madhav Chandrasekher & Mira Frick & Ryota Iijima & Yves Le Yaouanq, 2022. "Dual‐Self Representations of Ambiguity Preferences," Econometrica, Econometric Society, vol. 90(3), pages 1029-1061, May.
    2. Nabil I. Al-Najjar, 2015. "A Bayesian Framework for the Precautionary Principle," The Journal of Legal Studies, University of Chicago Press, vol. 44(S2), pages 337-365.

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    More about this item

    Keywords

    Dynamic consistency; Consequentialism; Subjective expected utility;
    All these keywords.

    JEL classification:

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

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