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Temptation as a result of ambiguity

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Barlo, Mehmet and Özkaya, Özde (2018) Temptation as a result of ambiguity. [Working Paper / Technical Report] Sabanci University ID:UNSPECIFIED

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Abstract

Employing well-accepted axioms on preferences under ambiguity and demanding every acceptable menu to have an unambiguous value, we obtain a multiple-selves representation of preferences with temptation. We show that when evaluating a menu, the decision maker can be thought to imagine that with some menu-dependent probability his/her ``ego'' is in charge and he/she consumes the best alternative, whereas with the remaining probability the decision maker faces an ambiguity about his/her consumption as he/she does not know which one of his/her ``alter egos'' is to decide. We also establish that our multiple-selves representation transforms into a dual-self representation under a more restrictive condition. Finally, the relation of our representation theorem with some models of temptation is analyzed and we show that our representation result delivers their key axioms concerning temptation.

Item Type:Working Paper / Technical Report
Uncontrolled Keywords:Temptation, Ambiguity, Dual-Self Representation, Multiple-Self Representation
Subjects:H Social Sciences > HB Economic Theory > HB135-147 Mathematical economics. Quantitative methods
H Social Sciences > HB Economic Theory
ID Code:36022
Deposited By:Mehmet Barlo
Deposited On:12 Aug 2018 21:39
Last Modified:12 Aug 2018 21:39

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