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On Freedom of Choice, Ambiguity, and the Preference for Easy Choices

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Abstract

This paper is devoted to the study of opportunity set comparisons when the characteristics of the options within the sets in question may be ambiguous. We assume that agents display a preference for freedom of choice, but also aversion to the presence of ambiguous options. We propose a suitable environment for approaching this problem, and provide axiomatic characterizations of several rules for ranking sets in such a context.

Suggested Citation

  • Ricardo Arlegi & Dinko Dimitrov, 2006. "On Freedom of Choice, Ambiguity, and the Preference for Easy Choices," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 0607, Departamento de Economía - Universidad Pública de Navarra.
  • Handle: RePEc:nav:ecupna:0607
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    File URL: ftp://ftp.econ.unavarra.es/pub/DocumentosTrab/DT0607.PDF
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    References listed on IDEAS

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    1. Pattanaik, Prasanta K. & Xu, Yongsheng, 2000. "On diversity and freedom of choice," Mathematical Social Sciences, Elsevier, vol. 40(2), pages 123-130, September.
    2. Faruk Gul & Wolfgang Pesendorfer, 2001. "Temptation and Self-Control," Econometrica, Econometric Society, vol. 69(6), pages 1403-1435, November.
    3. Walter Bossert, 1996. "Opportunity sets and individual well-being," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 14(1), pages 97-112.
    4. Loomes, Graham & Sugden, Robert, 1982. "Regret Theory: An Alternative Theory of Rational Choice under Uncertainty," Economic Journal, Royal Economic Society, vol. 92(368), pages 805-824, December.
    5. Bossert, Walter, 2000. "Opportunity sets and uncertain consequences1," Journal of Mathematical Economics, Elsevier, vol. 33(4), pages 475-496, May.
    6. repec:ebl:ecbull:v:4:y:2004:i:11:p:1-7 is not listed on IDEAS
    7. Bossert Walter & Pattanaik Prasanta K. & Xu Yongsheng, 1994. "Ranking Opportunity Sets: An Axiomatic Approach," Journal of Economic Theory, Elsevier, vol. 63(2), pages 326-345, August.
    8. Gul, Faruk, 1991. "A Theory of Disappointment Aversion," Econometrica, Econometric Society, vol. 59(3), pages 667-686, May.
    9. 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.
    10. Dinko Dimitrov & Ruud Hendrickx & Peter Borm, 2004. "Good and bad objects: the symmetric difference rule," Economics Bulletin, AccessEcon, vol. 4(11), pages 1-7.
    11. Faruk Gul & Wolfgang Pesendorfer, 2004. "Self-Control and the Theory of Consumption," Econometrica, Econometric Society, vol. 72(1), pages 119-158, January.
    12. Jones, Peter & Sugden, Robert, 1982. "Evaluating choice," International Review of Law and Economics, Elsevier, vol. 2(1), pages 47-65, June.
    13. Tversky, Amos & Kahneman, Daniel, 1986. "Rational Choice and the Framing of Decisions," The Journal of Business, University of Chicago Press, vol. 59(4), pages 251-278, October.
    14. Graham Loomes & Robert Sugden, 1986. "Disappointment and Dynamic Consistency in Choice under Uncertainty," Review of Economic Studies, Oxford University Press, vol. 53(2), pages 271-282.
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    More about this item

    Keywords

    ambiguity aversion; easy choices; ranking sets; freedom of choice.;

    JEL classification:

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

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