Subjective independence and concave expected utility

A-Tier
Journal: Journal of Economic Theory
Year: 2015
Volume: 158
Issue: PA
Pages: 33-53

Authors (2)

Lehrer, Ehud (not in RePEc) Teper, Roee (University of Pittsburgh)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

When a potential hedge between alternatives does not reduce the exposure to uncertainty, we say that the decision maker considers these alternatives structurally similar. We offer a novel approach and suggest that structural similarity is subjective and should be different across decision makers. Structural similarity can be recovered through a property of the individual's preferences referred to as subjective codecomposable independence. This property characterizes a class of event-separable models and allows us to differentiate between perception of uncertainty and attitude towards it. In addition, our approach provides a behavioral foundation to Concave Expected Utility preferences.

Technical Details

RePEc Handle
repec:eee:jetheo:v:158:y:2015:i:pa:p:33-53
Journal Field
Theory
Author Count
2
Added to Database
2026-01-29