A Unique Costly Contemplation Representation∗

We extend the costly contemplation model to preferences over sets of lotteries, assuming that the state-dependent utilities are von Neumann-Morgenstern. The contemplation costs are uniquely pinned down in a reduced form representation, where the decision-maker selects a subjective measure over expected utility functions instead of a subjective signal over a subjective state space. We show that in this richer setup, costly contemplation is characterized by Aversion to Contingent Planning, Indifference to Randomization, Translation Invariance, and Strong Continuity. ∗We thank Bart Lipman, Massimo Marinacci, and seminar participants at Berkeley, MIT, and Stanford Econ/GSB for helpful comments. †Correspondence address: MIT, Department of Economics, E52-383A, 50 Memorial Drive, Cambridge, MA 02142. Email: [email protected]. ‡Correspondence address: Boston University, Department of Economics, 270 Bay State Road, Boston, MA 02215. Email: [email protected].