Preferences under ignorance

Gossner, Olivier ORCID: 0000-0003-3950-0208 and Kuzmics, Christoph (2018) Preferences under ignorance. International Economic Review. ISSN 0020-6598

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Abstract

A decision maker (DM) makes choices from different sets of alternatives. The DM is initially ignorant of the payoff associated with each alternative, and learns these payoffs only after a large number of choices have been made. We show that, in the presence of an outside option, once payoffs are learned, the optimal choice rule from sets of alternatives can be rationalized by a DM with strict preferences over all alternatives. Under this model, the DM has preferences for preferences while being ignorant of what preferences are “right”.

Item Type:	Article
Official URL:	https://onlinelibrary.wiley.com/journal/14682354
Additional Information:	© 2018 Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association
Divisions:	Mathematics
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HC Economic History and Conditions
JEL classification:	C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C73 - Stochastic and Dynamic Games; Evolutionary Games; Repeated Games D - Microeconomics > D0 - General > D01 - Microeconomic Behavior: Underlying Principles D - Microeconomics > D1 - Household Behavior and Family Economics > D11 - Consumer Economics: Theory
Date Deposited:	22 Mar 2018 10:44
Last Modified:	11 Dec 2024 21:35
URI:	http://eprints.lse.ac.uk/id/eprint/87332

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