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Search and Satisficing
, 2010
"... Many options are available even for everyday choices. In practice, most decisions are made without full examination of all such options, so that the best available option may be missed. We develop a searchtheoretic choice experiment to study the impact of incomplete consideration on the quality o ..."
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Cited by 9 (2 self)
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Many options are available even for everyday choices. In practice, most decisions are made without full examination of all such options, so that the best available option may be missed. We develop a searchtheoretic choice experiment to study the impact of incomplete consideration on the quality of choices. We find that many decisions can be understood using the satisficing model of Simon [1955]: most subjects search sequentially, stopping when a “satisficing ” level of reservation utility is realized. We find that reservation utilities and search order respond systematically to changes in the decision making environment.
A model of procedural decision making in the presence of risk, Internat
 Econ. Rev
"... 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 t ..."
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Cited by 7 (1 self)
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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. 1.
Nash Equilibrium in Games with Incomplete Preferences," Economic Theory
, 2005
"... This paper investigates Nash equilibrium under the possibility that preferences may be incomplete. I characterize the Nashequilibriumset of such a game as the union of the Nashequilibriumsets of certain derived games with complete preferences. These games with complete preferences can be derived ..."
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Cited by 7 (0 self)
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This paper investigates Nash equilibrium under the possibility that preferences may be incomplete. I characterize the Nashequilibriumset of such a game as the union of the Nashequilibriumsets of certain derived games with complete preferences. These games with complete preferences can be derived from the original game by a simple linear procedure, provided that preferences admit a concave vectorrepresentation. These theorems extend some results on finite games by Shapley and Aumann. The applicability of the theoretical results is illustrated with examples from oligopolistic theory, where firms are modelled to aim at maximizing both profits and sales (and thus have multiple objectives). Mixed strategy and trembling hand perfect equilibria are also discussed.
Mechanism design with approximate valuations
 In Proceedings of the 3rd Innovations in Theoretical Computer Science conference, ITCS '12
, 2012
"... Abstract We study singlegood, incompleteinformation auctions in a Knightian setting that is approximate: that is, when each player knows his true payoff type only within a constant factor δ ∈ (0, 1). On the negative side, we prove that in our setting no dominantstrategy mechanism can significant ..."
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Cited by 5 (4 self)
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Abstract We study singlegood, incompleteinformation auctions in a Knightian setting that is approximate: that is, when each player knows his true payoff type only within a constant factor δ ∈ (0, 1). On the negative side, we prove that in our setting no dominantstrategy mechanism can significantly guarantee better social welfare than that achievable by assigning the good to a random player. On the positive side, we provide tight upper and lower bounds for the fraction of the maximum social welfare achievable in undominated strategies, whether deterministically or probabilistically. Pay attention that there are some different versions of this paper:
How vague one can be? Rational preferences without completeness or transitivity. Working paper
, 2003
"... What can it mean for preferences to be rational when transitivity or completenss are not assumed? In this paper we provide a framework and a set of conditions to deal with this question. We provide representation results in terms of a pair of functions, a utility function and a vagueness function. ..."
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Cited by 5 (1 self)
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What can it mean for preferences to be rational when transitivity or completenss are not assumed? In this paper we provide a framework and a set of conditions to deal with this question. We provide representation results in terms of a pair of functions, a utility function and a vagueness function.
2003): “Intertemporal preference for flexibility and risky choice,” Mimeo
"... We derive an intertemporal theory of choice, in the spirit of Kreps and Porteus (1978), where decision makers have incomplete preferences. This can be used to model indecisiveness as well as unforeseen contingencies. The key to our approach is a time consistency condition and therefore the normativ ..."
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Cited by 5 (1 self)
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We derive an intertemporal theory of choice, in the spirit of Kreps and Porteus (1978), where decision makers have incomplete preferences. This can be used to model indecisiveness as well as unforeseen contingencies. The key to our approach is a time consistency condition and therefore the normative connection between exante and expost choice. The time consistency condition enables a representation that is a straight forward extension of recursive utility with the exception that it features an intertemporal ‘utility for flexibility’.
Cardinality versus Ordinality: A Suggested Compromise
"... By taking sets of utility functions as primitive, we define an ordering over assumptions on utility functions that gauges their measurement requirements. Cardinal and ordinal assumptions constitute two levels of measurability, but other assumptions lie between these extremes. We apply the ordering t ..."
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Cited by 5 (0 self)
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By taking sets of utility functions as primitive, we define an ordering over assumptions on utility functions that gauges their measurement requirements. Cardinal and ordinal assumptions constitute two levels of measurability, but other assumptions lie between these extremes. We apply the ordering to explanations of why preferences should be convex. The assumption that utility is concave qualifies as a compromise between cardinality and ordinality, while the ArrowKoopmans explanation, supposedly an ordinal theory, relies on utilities in the cardinal measurement class. In social choice theory, a concavity compromise between ordinality and cardinality is also possible and rationalizes the core utilitarian policies.
Uncertainty in Mechanism Design
, 2006
"... We consider mechanism design problems with Knightian uncertainty formalized using incomplete preferences, as in Bewley (1986). Without completeness, decision making depends on a set of beliefs, and an action is preferred to another if and only if it has larger expected utility for all beliefs in thi ..."
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Cited by 4 (0 self)
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We consider mechanism design problems with Knightian uncertainty formalized using incomplete preferences, as in Bewley (1986). Without completeness, decision making depends on a set of beliefs, and an action is preferred to another if and only if it has larger expected utility for all beliefs in this set. We consider two natural notions of incentive compatibility in this setting: maximal incentive compatibility requires that no strategy has larger expected utility than reporting truthfully for all beliefs, while optimal incentive compatibility requires that reporting truthfully has larger expected utility than all other strategies for all beliefs. In a model with a continuum of types, we show that optimal incentive compatibility is equivalent to expost incentive compatibility under fairly general conditions on beliefs. In a model with a discrete type space, we characterize full extraction of rents generated from private information. We show that full extraction is generically possible with maximal incentive compatible mechanisms, but requires sufficient disagreement across types, which neither holds nor fails generically, with optimal incentive compatible mechanisms.
Freedom, Opportunity and Wellbeing
, 2010
"... This paper reexamines key results from the measurement of opportunity freedom, or the extent to which a set of options offers a decision maker real opportunities to achieve. Three cases are investigated: no preferences, a single preference, and plural preferences. The three corresponding evaluatio ..."
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Cited by 3 (1 self)
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This paper reexamines key results from the measurement of opportunity freedom, or the extent to which a set of options offers a decision maker real opportunities to achieve. Three cases are investigated: no preferences, a single preference, and plural preferences. The three corresponding evaluation methods – the cardinality relation, the indirect utility relation, and the effective freedom relation – and their variations are considered within a common axiomatic framework. Special attention is given to representations of freedom rankings, with the goal of providing practical approaches for measuring opportunity freedom and the extent of capabilities.