Awareness of Unawareness: A Theory of Decision Making in the Face of Ignorance
In the wake of growing awareness, decision makers anticipate that they might acquire knowledge that, in their current state of ignorance, is unimaginable. Supposedly, this anticipation manifests itself in the decision makers' choice behavior. In this paper we model the anticipation of growing awareness, lay choice-based axiomatic foundations to a subjective expected utility representation of beliefs about the likelihood of discovering unknown consequences, and assign utility to consequences that are not only unimaginable but may also be nonexistent. In so doing, we maintain the flavor of reverse Bayesianism of Karni and VierÃ¸ (2013, 2015).
|Date of creation:||Jan 2014|
|Publication status:||Published in Journal of Economic Theory|
|Contact details of provider:|| Postal: Kingston, Ontario, K7L 3N6|
Phone: (613) 533-2250
Fax: (613) 533-6668
Web page: http://qed.econ.queensu.ca/
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.:
- Yusufcan Masatlioglu & Daisuke Nakajima & Erkut Ozbay, 2009.
NajEcon Working Paper Reviews
- Machina Mark J. & Schmeidler David, 1995.
"Bayes without Bernoulli: Simple Conditions for Probabilistically Sophisticated Choice,"
Journal of Economic Theory,
Elsevier, vol. 67(1), pages 106-128, October.
- Mark J. Machina & David Schmeidler, 1994. "Bayes Without Bernoulli: Simple Conditions for Probabilistically Sophisticated Choice," Discussion Papers 1088, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Simon Grant & John Quiggin, 2013.
"Inductive reasoning about unawareness,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 54(3), pages 717-755, November.
- Grant, Simon & Quiggin, John, 2012. "Inductive Reasoning About Unawareness," Risk and Sustainable Management Group Working Papers 151202, University of Queensland, School of Economics.
- Grant, Simon & Quiggin, John, 2009. "Inductive Reasoning About Unawareness," Risk and Sustainable Management Group Working Papers 151188, University of Queensland, School of Economics.
- Simon Grant & John Quiggin, 2009. "Inductive reasoning about unawareness," Risk & Uncertainty Working Papers WPR09_1, Risk and Sustainable Management Group, University of Queensland.
- Edi Karni & Marie-Louise Vierø, 2012.
""Reverse Bayesianism": A Choice-Based Theory of Growing Awareness,"
Economics Working Paper Archive
591, The Johns Hopkins University,Department of Economics.
- Edi Karni & Marie-Louise Vier?, 2013. ""Reverse Bayesianism": A Choice-Based Theory of Growing Awareness," American Economic Review, American Economic Association, vol. 103(7), pages 2790-2810, December.
- Edi Karni & Marie-Louise Vierø, 2010. ""Reverse Bayesianism": A Choice-Based Theory of Growing Awareness," Working Papers 1258, Queen's University, Department of Economics.
- Sujoy Mukerji & Peter Klibanoff, 2002.
"A Smooth Model of Decision,Making Under Ambiguity,"
Economics Series Working Papers
113, University of Oxford, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:qed:wpaper:1322. 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: (Mark Babcock)
If references are entirely missing, you can add them using this form.