Range Convexity and Ambiguity Averse Preferences
Paper Number:
1081
Date:
01/01/2000
Abstract:
We show that range convexity of beliefs, a 'technical' condition that appears naturally in axiomatizations of preferences in a Savage-like framework, imposes some unexpected restrictions when modelling ambiguity averse preferences. That is, when it is added to a mild condition, range convexity makes the preferences collapse to subjective expected utility as soon as they satisfy structural conditions that are typically used to characterize ambiguity aversion.
Paper Length:
Paper:
wp1081.pdf