A Model of Procedural Decision Making in the Presence of Risk

28 Pages Posted: 29 Dec 2002

See all articles by Juan Dubra

Juan Dubra

University of Montevideo - Department of Economics

Efe A. Ok

Leonard N. Stern School of Business - Department of Economics

Abstract

We introduce a procedural model of risky choice in which an individual is endowed with a core preference relation that may be highly incomplete. She can, however, derive further rankings of alternatives from her core preferences by means of a procedure based on the independence axiom. We find that the preferences that are generated from an initial set of rankings according to this procedure can be represented by means of a set of von Neumann-Morgenstern utility functions, thereby allowing for incompleteness of preference relations. The proposed theory also yields new characterizations of the stochastic dominance orderings.

Suggested Citation

Dubra, Juan and Ok, Efe A., A Model of Procedural Decision Making in the Presence of Risk. Available at SSRN: https://ssrn.com/abstract=342747

Juan Dubra (Contact Author)

University of Montevideo - Department of Economics ( email )

Prudencio de Pena 2440
Montevideo, CP 11600
Uruguay
5982 707 4461 (Phone)

HOME PAGE: http:\\www2.um.edu.uy\dubraj

Efe A. Ok

Leonard N. Stern School of Business - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States
212-998-8920 (Phone)
212-995-4186 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
34
Abstract Views
931
PlumX Metrics