Twofold multiprior preferences and failures of contingent reasoning

DOI10.1016/J.JET.2022.105448zbMATH Open1492.91112arXiv2012.14557OpenAlexW4220983430MaRDI QIDQ2673161FDOQ2673161

Authors: Federico Echenique, Masaki Miyashita, Yuta Nakamura, Luciano Pomatto, Jamie Vinson 

Publication date: 9 June 2022

Published in: Journal of Economic Theory (Search for Journal in Brave)

Abstract: We propose a model of incomplete extit{twofold multiprior preferences}, in which an act $f$ is ranked above an act $g$ only when $f$ provides higher utility in a worst-case scenario than what $g$ provides in a best-case scenario. The model explains failures of contingent reasoning, captured through a weakening of the state-by-state monotonicity (or dominance) axiom. Our model gives rise to rich comparative statics results, as well as extension exercises, and connections to choice theory. We present an application to second-price auctions.

Full work available at URL: https://arxiv.org/abs/2012.14557

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zbMATH Keywords

decision theoryconservatismincomplete preferenceobvious dominance

Mathematics Subject Classification ID

Decision theory (91B06) Individual preferences (91B08) Auctions, bargaining, bidding and selling, and other market models (91B26)

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Cited In (3)

• Alpha-maxmin as an aggregation of two selves
• Utilitarian Preferences With Multiple Priors
• Subjective complexity under uncertainty

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