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Ambiguous events

Massimiliano Amarante

Title:
Ambiguous events
Author(s):
Amarante, Massimiliano
Date:
Type:
Working papers
Department:
Economics
Permanent URL:
Series:
Department of Economics Discussion Papers
Part Number:
0304-04
Publisher:
Department of Economics, Columbia University
Publisher Location:
New York
Abstract:
We focus on a class of Multiple Prior Models. Those characterized by nonatomic countably additive priors. Preferences generating such representations have been recently axiomatized in [17]. We argue that this is the proper setting for comparing the notions of unambiguous event given by Epstein and Zhang in [7] and by Ghirardato, Maccheroni and Marinacci in [10]. The two definitions are known to be nonequivalent. Our main result is that an event T is unambiguous in the sense of Epstein and Zhang if and only if either (i) it is unambiguous in the sense of [10]; or (ii) conditional on T, the decision maker is an expected utility maximizer. We also provide an easy operational criterion for establishing whether or not an event is unambiguous in the sense of Epstein and Zhang.
Subject(s):
Economic theory
Item views:
204
Metadata:
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