Representing Preferences with a Unique Subjective State Space: Corrigendum

Supplement to “ Representing Preferences with a Unique Subjective State Space : Corrigendum ”

S1. AXIOMS AND ADDITIVE EXPECTED-UTILITY REPRESENTATION Let B = {b1 bK} denote the set of pure outcomes. Let ∆(B) denote the set of probability distributions on B. Finally, let denote a preference relation on the set of nonempty subsets of ∆(B), where this space is endowed with the Hausdorff topology. Let dh(x y) denote the Hausdorff distance between x and y .1 DLR (2001) considered the followi...

Representing Preferences with a Unique Subjective State Space : a Corrigendum

Dekel, Lipman and Rustichini (2001) (henceforth DLR) axiomatically characterized three representations of preferences that allow for a desire for flexibility and/or commitment. In one of these representations (ordinal expected utility), the independence axiom is stated in a weaker form than is necessary to obtain the representation; in another (additive expected utility), the continuity axiom i...

Representing Preferences with a Unique Subjective State Space: Corrigendum: Supplementary Appendix

Let B = {b1, . . . , bK} denote a set of pure outcomes. Let ∆(B) denote the set of probability distributions on B. Finally, let denote a preference relation on the set of nonempty subsets of ∆(B) where this space is endowed with the Hausdorff topology. Let dh(x, y) denote the Hausdorff distance between x and y. ∗Economics Dept., Northwestern University, and School of Economics, Tel Aviv Univers...

Representing Preferences with a Unique Subjective State Space: Corrigendum1

Completing the State Space with Subjective States

We define an opportunity act as a mapping from an exogenously given objective state space to a set of lotteries over prizes, and consider preferences over opportunity acts. We allow the preferences to be possibly uncertainty averse. Our main theorem provides an axiomatization of the maxmin expected utility model. In the theorem we construct subjective states to complete the objective state spac...