Framing Contingencies ∗

We introduce a model of decision making under uncertainty which incorporates framing effects for how contingencies are described. The primitive is a family of preferences, indexed by partitions of the state space. Each partition corresponds to a description of the state space. We axiomatically characterize the following partition-dependent expected utility representation. The decision maker has a nonadditive set function over events. She then computes expected utility with respect to her partition-dependent belief, which weights explicitly listed events. One interpretation of the model is in terms of unforeseen contingencies. We propose definitions for the events which are completely foreseen or unforeseen by decision maker and study their properties. ∗This paper supersedes an earlier draft titled “Unawareness and Framing.” Comments from anonymous referees, Eddie Dekel, and Todd Sarver on the prior draft were very helpful. We thank the National Science Foundation for financial support under Grant SES-0550224. †Department of Economics, University of California, 549 Evans Hall #3880, Berkeley, CA 94720-3880. Email: [email protected]. ‡Department of Economics, Washington University in Saint Louis, Campus Box 1208, Saint Louis, MO 63130. Email: [email protected].