A model of procedural decision making in the presence of risk

Juan Dubra; Efe A. Ok

doi:10.1111/1468-2354.t01-1-00048

A model of procedural decision making in the presence of risk

Juan Dubra, Efe A. Ok

Research output: Contribution to journal › Article › peer-review

Abstract

We introduce a procedural model of risky choice in which an individual is endowed with a core preference relation that may be highly incomplete. She can, however, derive further rankings of alternatives from her core preferences by means of a procedure based on the independence axiom. We find that the preferences that are generated from an initial set of rankings according to this procedure can be represented by means of a set of von Neumann-Morgenstern utility functions, thereby allowing for incompleteness of preference relations. The proposed theory also yields new characterizations of the stochastic dominance orderings.

Original language	English (US)
Pages (from-to)	1053-1080
Number of pages	28
Journal	International Economic Review
Volume	43
Issue number	4
DOIs	https://doi.org/10.1111/1468-2354.t01-1-00048
State	Published - Nov 2002

ASJC Scopus subject areas

Economics and Econometrics

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10.1111/1468-2354.t01-1-00048

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A model of procedural decision making in the presence of risk

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