TY - JOUR
T1 - Lexicographic expected utility with a subjective state space
AU - Higashi, Youichiro
AU - Hyogo, Kazuya
N1 - Funding Information:
This paper is based on Chapter 1 of Higashi’s and Chapter 2 of Hyogo’s dissertations at University of Rochester. We are grateful to Larry Epstein for his patient encouragement and invaluable suggestions. We have benefited from comments by an anonymous referee, Sophie Bade, Barton Lipman, Yutaka Nakamura, Jawwad Noor, John Quiggin, and Norio Takeoka. We acknowledge helpful feedback from audiences of the 2006 JEA Spring Meeting, RUD 2006, SWET 2007, Hitotsubashi, Kyoto, Okayama, Shinshu, Toyama, Waseda, and Yokohama National Universities. Hyogo gratefully acknowledges the financial support by KAKENHI (19830099).
PY - 2012/1
Y1 - 2012/1
N2 - This paper provides a model that allows for a criterion of admissibility based on a subjective state space. For this purpose, we build a non-Archimedean model of preference with subjective states, generalizing Blume et al. (Econometrica 59:61-79, 1991), who present a non-Archimedean model with exogenous states; and Dekel et al. (Econometrica 69:891-934, 2001), who present an Archimedean model with an endogenous state space. We interpret the representation as modeling an agent who has several "hypotheses" about her state space, and who views some as "infinitely less relevant" than others.
AB - This paper provides a model that allows for a criterion of admissibility based on a subjective state space. For this purpose, we build a non-Archimedean model of preference with subjective states, generalizing Blume et al. (Econometrica 59:61-79, 1991), who present a non-Archimedean model with exogenous states; and Dekel et al. (Econometrica 69:891-934, 2001), who present an Archimedean model with an endogenous state space. We interpret the representation as modeling an agent who has several "hypotheses" about her state space, and who views some as "infinitely less relevant" than others.
KW - Admissibility
KW - Lexicographic expected utility
KW - Non-Archimedean preferences
KW - Subjective state space
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U2 - 10.1007/s00199-010-0546-x
DO - 10.1007/s00199-010-0546-x
M3 - Article
AN - SCOPUS:84855250449
SN - 0938-2259
VL - 49
SP - 175
EP - 192
JO - Economic Theory
JF - Economic Theory
IS - 1
ER -