Correlation concern

Ellis, Andrew ORCID: 0000-0002-7552-4832 (2025) Correlation concern. Journal of Economic Theory. ISSN 0022-0531 (In Press)

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Abstract

In many choice problems, the interaction between several distinct variables determines the payoff of each alternative. I propose and axiomatize a model of a decision maker who recognizes that she may not accurately perceive the correlation between these variables, and who takes this into account when making her decision. She chooses as if she calculates each alternative's expected outcome under multiple possible correlation structures, and then evaluates it according to the worst expected outcome.

Item Type:	Article
Additional Information:	© 2025 The Author(s)
Divisions:	Economics
Subjects:	H Social Sciences > HB Economic Theory
Date Deposited:	05 Aug 2025 13:12
Last Modified:	06 Aug 2025 16:06
URI:	http://eprints.lse.ac.uk/id/eprint/129044

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