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
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.
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