Deferral, incomplete preferences and confidence
Author's abstract: A theory of when to defer a decision is proposed, according to which a decision maker defers if and only if his confidence in the relevant beliefs does not match up to the stakes involved in the decision. It uses the model of confidence in beliefs and the notion of stakes introduced in Hill (2010). Firstly, a representation of deferral of binary choices is proposed and axiomatised; it can alternatively be considered as a representation of incomplete preferences, where indeterminacy of preferences is interpreted as taking the deferral option. Then the question of what the decision maker would do if he was not allowed to defer is studied; mild axioms governing the relationship between preferences in the presence and absence of a deferral option characterise a simple model of how forced choice relates to choice where deferral is possible. Finally, the results are extended to deferral of choices from non-binary menus. Compared to existing accounts of deferral, the theory proposed here is unique in analysing deferral entirely in terms of the attitudes of the agent at the moment of choice, rather than his expectation about his or others’ future attitudes, for example. Preliminary axiomatic analysis shows that this difference is behaviourally meaningful.
|Date of creation:||17 Feb 2011|
|Contact details of provider:|| Postal: HEC Paris, 78351 Jouy-en-Josas cedex, France|
Web page: http://www.hec.fr/
More information through EDIRC
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.:
- Kopylov, Igor, 2009. "Choice deferral and ambiguity aversion," Theoretical Economics, Econometric Society, vol. 4(2), June.
- Itzhak Gilboa & Fabio Maccheroni & Massimo Marinacci & David Schmeidler, 2010.
"Objective and Subjective Rationality in a Multiple Prior Model,"
Econometric Society, vol. 78(2), pages 755-770, March.
- Itzhak Gilboa & Fabio Maccheroni & Massimo Marinacci & David Schmeidler, 2008. "Objective and Subjective Rationality in a Multiple Prior Model," Carlo Alberto Notebooks 73, Collegio Carlo Alberto, revised 2008.
- Itzhak Gilboa & Fabio Maccheroni & Massimo Marinacci & David Schmeidler, 2010. "Objective and Subjective Rationality in a Multiple Prior Model," Post-Print hal-00537082, HAL.
- Nehring, Klaus, 2009. "Imprecise probabilistic beliefs as a context for decision-making under ambiguity," Journal of Economic Theory, Elsevier, vol. 144(3), pages 1054-1091, May.
- Fabio Maccheroni & Massimo Marinacci & Aldo Rustichini, 2006. "Ambiguity Aversion, Robustness, and the Variational Representation of Preferences," Econometrica, Econometric Society, vol. 74(6), pages 1447-1498, November.
- Fabio Maccheroni & Massimo Marinacci & Aldo Rustichini, 2004. "Ambiguity Aversion, Robustness, and the Variational Representation of Preferences," Carlo Alberto Notebooks 12, Collegio Carlo Alberto, revised 2006.
- Dhar, Ravi, 1997. " Consumer Preference for a No-Choice Option," Journal of Consumer Research, Oxford University Press, vol. 24(2), pages 215-231, September.
- Efe A. Ok & Pietro Ortoleva & Gil Riella, 2012. "Incomplete Preferences Under Uncertainty: Indecisiveness in Beliefs versus Tastes," Econometrica, Econometric Society, vol. 80(4), pages 1791-1808, July.
- Faruk Gul & Wolfgang Pesendorfer, 2001. "Temptation and Self-Control," Econometrica, Econometric Society, vol. 69(6), pages 1403-1435, November.
- W. Pesendorfer & F. Gul, 1999. "Temptation and Self-Control," Princeton Economic Theory Papers 99f1, Economics Department, Princeton University.
- Faro, José Heleno, 2015. "Variational Bewley preferences," Journal of Economic Theory, Elsevier, vol. 157(C), pages 699-729.
- Faro, José Heleno, 2011. "Variational Bewley Preferences," Insper Working Papers wpe_258, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
- Kopylov, Igor, 2009. "Finite additive utility representations for preferences over menus," Journal of Economic Theory, Elsevier, vol. 144(1), pages 354-374, January.
- Sen, Amartya, 1993. "Internal Consistency of Choice," Econometrica, Econometric Society, vol. 61(3), pages 495-521, May.
- Akerlof, George A, 1991. "Procrastination and Obedience," American Economic Review, American Economic Association, vol. 81(2), pages 1-19, May.
- Tsogbadral Galaabaatar & Edi Karni, 2010. "Objective and Subjective Expected Utility with Incomplete Preferences," Economics Working Paper Archive 572, The Johns Hopkins University,Department of Economics.
- Ghirardato, Paolo & Maccheroni, Fabio & Marinacci, Massimo, 2004. "Differentiating ambiguity and ambiguity attitude," Journal of Economic Theory, Elsevier, vol. 118(2), pages 133-173, October.
- Mandler, Michael, 2009. "Indifference and incompleteness distinguished by rational trade," Games and Economic Behavior, Elsevier, vol. 67(1), pages 300-314, September.
- Gilboa, Itzhak & Schmeidler, David, 1989. "Maxmin expected utility with non-unique prior," Journal of Mathematical Economics, Elsevier, vol. 18(2), pages 141-153, April.
- Itzhak Gilboa & David Schmeidler, 1989. "Maxmin Expected Utility with Non-Unique Prior," Post-Print hal-00753237, HAL.
- Tsogbadral Galaabaatar & Edi Karni, 2013. "Subjective Expected Utility With Incomplete Preferences," Econometrica, Econometric Society, vol. 81(1), pages 255-284, January.
- Eliaz, Kfir & Ok, Efe A., 2006. "Indifference or indecisiveness? Choice-theoretic foundations of incomplete preferences," Games and Economic Behavior, Elsevier, vol. 56(1), pages 61-86, July.
- Amartya K. Sen, 1971. "Choice Functions and Revealed Preference," Review of Economic Studies, Oxford University Press, vol. 38(3), pages 307-317.
- Amos Tversky & Itamar Simonson, 1993. "Context-Dependent Preferences," Management Science, INFORMS, vol. 39(10), pages 1179-1189, October.
- George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69, pages 213-213. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ebg:heccah:0940. 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: (Antoine Haldemann)
If references are entirely missing, you can add them using this form.