Related papers: Recursive Preferences and Ambiguity Attitudes
We study a simple example of a sequential game illustrating problems connected with making rational decisions that are universal for social sciences. The set of chooser's optimal decisions that manifest his preferences in case of a constant…
We are concerned with dependency-oriented morphosyntactic parsing of running text. While a parsing grammar should avoid introducing structurally unresolvable distinctions in order to optimise on the accuracy of the parser, it also is…
In this paper, we show that the presence of the Archimedean and the mixture-continuity properties of a binary relation, both empirically non-falsifiable in principle, foreclose the possibility of consistency (transitivity) without…
We introduce a model-free preference under ambiguity, as a primitive trait of behavior, which we apply once as well as repeatedly. Its single and double application yield simple, easily interpretable definitions of ambiguity aversion and…
Two major difficulties in using default logics are their intractability and the problem of selecting among multiple extensions. We propose an approach to these problems based on integrating nommonotonic reasoning with plausible reasoning…
Complexity of the problem of choosing among uncertain acts is a salient feature of many of the environments in which departures from expected utility theory are observed. I propose and axiomatize a model of choice under uncertainty in which…
We study preferences estimated from finite choice experiments and provide sufficient conditions for convergence to a unique underlying "true" preference. Our conditions are weak, and therefore valid in a wide range of economic environments.…
We consider continuous-time consensus systems whose interactions satisfy a form or reciprocity that is not instantaneous, but happens over time. We show that these systems have certain desirable properties: They always converge…
There are many examples in the literature that suggest that indistinguishability is intransitive, despite the fact that the indistinguishability relation is typically taken to be an equivalence relation (and thus transitive). It is shown…
We explore intertemporal preferences that are recursive and account for local intertemporal substitution. First, we establish a rigorous foundation for these preferences and analyze their properties. Next, we examine the associated optimal…
We propose a game-theoretic framework that incorporates both incomplete information and general ambiguity attitudes on factors external to all players. Our starting point is players' preferences on payoff-distribution vectors, essentially…
A group of experts, for instance climate scientists, is to choose among two policies $f$ and $g$. Consider the following decision rule. If all experts agree that the expected utility of $f$ is higher than the expected utility of $g$, the…
In this work we generalize standard Decision Theory by assuming that two outcomes can also be incomparable. Two motivating scenarios show how incomparability may be helpful to represent those situations where, due to lack of information,…
Accepting a proposition means that our confidence in this proposition is strictly greater than the confidence in its negation. This paper investigates the subclass of uncertainty measures, expressing confidence, that capture the idea of…
An important characteristic of many logics for Artificial Intelligence is their nonmonotonicity. This means that adding a formula to the premises can invalidate some of the consequences. There may, however, exist formulae that can always be…
We study the interaction between strategy, heterogeneity and growth in a two-agent model of capital accumulation. Preferences are represented by recursive utility functions with decreasing marginal impatience. The stationary equilibria of…
The problem of demand inversion - a crucial step in the estimation of random utility discrete-choice models - is equivalent to the determination of stable outcomes in two-sided matching models. This equivalence applies to random utility…
We study a general class of consumption-savings problems with recursive preferences. We characterize the sign of the consumption response to arbitrary shocks in terms of the product of two sufficient statistics: the elasticity of…
Complex reasoning problems are most clearly and easily specified using logical rules, but require recursive rules with aggregation such as count and sum for practical applications. Unfortunately, the meaning of such rules has been a…
An unconventional approach for optimal stopping under model ambiguity is introduced. Besides ambiguity itself, we take into account how ambiguity-averse an agent is. This inclusion of ambiguity attitude, via an $\alpha$-maxmin nonlinear…