Observability and “Second-Order Acts"
This note questions the behavioral content of second-order acts and their use in decision theoretic models. We show that there can be no verification mechanism to determine what the decision maker receives under a second-order act. This impossibility applies even in idealized repeated experiments where infinite data can be observed. JEL Classification Numbers:
|Date of creation:||01 Dec 2010|
|Contact details of provider:|| Postal: Center for Mathematical Studies in Economics and Management Science, Northwestern University, 580 Jacobs Center, 2001 Sheridan Road, Evanston, IL 60208-2014|
Web page: http://www.kellogg.northwestern.edu/research/math/
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- Tomasz Strzalecki, 2011.
"Axiomatic Foundations of Multiplier Preferences,"
Econometric Society, vol. 79(1), pages 47-73, 01.
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- Strzalecki, Tomasz, 2011. "Axiomatic Foundations of Multiplier Preferences," Scholarly Articles 14397610, Harvard University Department of Economics.
- Robert F. Nau, 2006. "Uncertainty Aversion with Second-Order Utilities and Probabilities," Management Science, INFORMS, vol. 52(1), pages 136-145, January.
- Chew, Soo Hong & Sagi, Jacob S., 2008. "Small worlds: Modeling attitudes toward sources of uncertainty," Journal of Economic Theory, Elsevier, vol. 139(1), pages 1-24, March.
- Sujoy Mukerji & Peter Klibanoff and Kyoungwon Seo, 2011. "Relevance and Symmetry," Economics Series Working Papers 539, University of Oxford, Department of Economics.
- Kyoungwon Seo, 2009. "Ambiguity and Second-Order Belief," Econometrica, Econometric Society, vol. 77(5), pages 1575-1605, 09.
- Peter Klibanoff & Massimo Marinacci & Sujoy Mukerji, 2005. "A Smooth Model of Decision Making under Ambiguity," Econometrica, Econometric Society, vol. 73(6), pages 1849-1892, November.
- Peter Klibanoff & Massimo Marinacci & Sujoy Mukerji, 2002. "A smooth model of decision making under ambiguity," ICER Working Papers - Applied Mathematics Series 11-2003, ICER - International Centre for Economic Research, revised Apr 2003.
- Sujoy Mukerji & Peter Klibanoff, 2002. "A Smooth Model of Decision,Making Under Ambiguity," Economics Series Working Papers 113, University of Oxford, Department of Economics.
- Simon Grant & Ben Polak & Tomasz Strzalecki, "undated". "Second-Order Expected Utility," Working Paper 8340, Harvard University OpenScholar.
- William Neilson, 2010. "A simplified axiomatic approach to ambiguity aversion," Journal of Risk and Uncertainty, Springer, vol. 41(2), pages 113-124, October.
- Yoram Halevy, 2007. "Ellsberg Revisited: An Experimental Study," Econometrica, Econometric Society, vol. 75(2), pages 503-536, 03.
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