Robustifying the Classical Model of Risk Preferences and Beliefs
UCSD Economics Discussion Paper No. 2002-06
Posted: 10 Sep 2002
Date Written: March 2002
Robustify - To identify the analytical aspects of a model that continue to hold under more general conditions. This usually requires expressing the model and its results in a particular manner, as statements that may be logically equivalent under the assumptions of a given model can differ widely in their robustness to dropping these assumptions. E.g.: "By expressing the classical expected utility/subjective probability model in event-theoretic terms, its basic concepts, tools and results can be locally and globally robustified to general 'event-smooth' preferences over subjectively uncertain acts that do not necessarily exhibit either expected utility risk preferences or probabilistic beliefs."
Keywords: Uncertainty, Risk, Subjective Probability
JEL Classification: D81
Suggested Citation: Suggested Citation