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Uncertainty, Efficiency and Incentive Compatibility

  • Nabil I. Al-Najjar
  • Luciano De Castro
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    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.

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    File URL: http://kellogg.northwestern.edu/faculty/decastro/htm/personal/maximin.pdf
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    Paper provided by Northwestern University, Center for Mathematical Studies in Economics and Management Science in its series Discussion Papers with number 1532.

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    Date of creation: 01 Dec 2010
    Handle: RePEc:nwu:cmsems:1532
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