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Preferences With Grades of Indecisiveness

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  • Stefania Minardi
  • Andrei Savochkin

Abstract

Departing from the traditional approach to modeling an agent who finds it difficult to make clear-cut comparisons between alternatives, we introduce the notion of graded preferences: Given two alternatives, the agent reports a number between 0 and 1, which reflects her inclination to prefer the first option over the second or, put differently, how confident she is about the superiority of the first one. In the classical framework of uncertainty, 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 (1986) 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. We also define and characterize, in terms of the representation, the notion of one agent being "more decisive" than another.

Suggested Citation

  • Stefania Minardi & Andrei Savochkin, 2013. "Preferences With Grades of Indecisiveness," Carlo Alberto Notebooks 309, Collegio Carlo Alberto.
  • Handle: RePEc:cca:wpaper:309
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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. Hill, Brian, 2016. "Incomplete preferences and confidence," Journal of Mathematical Economics, Elsevier, vol. 65(C), pages 83-103.
    3. Costa-Gomes, Miguel & Cueva, Carlos & Gerasimou, Georgios, 2014. "Choice, Deferral and Consistency," SIRE Discussion Papers 2015-17, Scottish Institute for Research in Economics (SIRE).
    4. Karni, Edi & Safra, Zvi, 2016. "A theory of stochastic choice under uncertainty," Journal of Mathematical Economics, Elsevier, vol. 63(C), pages 164-173.
    5. 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.
    6. McClellon, Morgan, 2016. "Confidence models of incomplete preferences," Mathematical Social Sciences, Elsevier, vol. 83(C), pages 30-34.

    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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