Incomplete Information and Lexicographic Choices: Some Continuity Results

Canadian Applied Mathematics Quarterly, Vol. 18, No. 2, Summer 2010

23 Pages Posted: 3 Sep 2012

See all articles by Debora Di Caprio

Debora Di Caprio

Universidad Complutense de Madrid (UCM) - GRINEI (Grupo de Investigación en Economía Política de la Innovación)

Francisco Santos‐Arteaga

Universidad Complutense de Madrid (UCM) - Institute of International Studies (ICEI)

Stephen Watson

York University

Date Written: 2010

Abstract

We construct a model where choices are defined by preference relations induced by incomplete information on a set of commodities, whose elements are given by finite dimensional vectors of characteristics. Imposing natural conditions on the choice set allows for preferences to be continuously and additively representable on it. Lexicographic choices are shown to follow from continuous preferences and to be representable by continuous utility functions that are both additive and lexicographic. Since the lexicographic quality of choice derives from the incomplete information assumption, lexicographic preferences should not be excluded from economic equilibrium theory unless choices are made under perfect information.

Keywords: Incomplete information, multiattribute utility, additive utility, induced preference, lexicographic utility

JEL Classification: D83, D81

Suggested Citation

Di Caprio, Debora and Santos Arteaga, Francisco and Watson, Stephen, Incomplete Information and Lexicographic Choices: Some Continuity Results (2010). Canadian Applied Mathematics Quarterly, Vol. 18, No. 2, Summer 2010, Available at SSRN: https://ssrn.com/abstract=2140104

Debora Di Caprio (Contact Author)

Universidad Complutense de Madrid (UCM) - GRINEI (Grupo de Investigación en Economía Política de la Innovación) ( email )

Campus de Somosaguas Finca Más Ferré
Madris, Madrid 28223
Spain

Francisco Santos Arteaga

Universidad Complutense de Madrid (UCM) - Institute of International Studies (ICEI) ( email )

Collado Villalba, Madrid, 28400
United States

Stephen Watson

York University ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
40
Abstract Views
412
PlumX Metrics