Are individuals always better off when their preferences can be represented by expected utility?I study this question in a bargaining game where individuals bargain over a pie of fixed size, and I contrast the share received in the long-run by expected utility maximisers with the share they...

We describe a methodology for making counterfactual predictions when the information held by strategic agents is a latent parameter. The analyst observes behavior which is rationalized by a Bayesian model in which agents maximize expected utility, given partial and differential information...

We describe a methodology for making counterfactual predictions when the information held by strategic agents is a latent parameter. The analyst observes behavior which is rationalized by a Bayesian model in which agents maximize expected utility given partial and differential information about...

We study information aggregation in a dynamic trading model with partially informed and ambiguity averse traders. We show theoretically that separable securities, introduced by Ostrovsky (2012) in the context of Subjective Expected Utility, no longer aggregate information if some traders have...

This paper presents the results of a study that tests the hypothesis that the effect of risk preference on choice is a function of the specific risk-preference measure utilized. In addition, this study tests the hypothesis that the effect of risk preference on choice depends upon its interaction...

An agent has to choose among a finite set of actions with payoffs depending on an unknown state of the world with two (possibly correlated) binary components, (θ1, θ2), θi∈{0,1}. Before making the choice, the agent can learn about the state by dynamically allocating his limited attention...

This paper introduces a model of decision making under ambiguity by extending the Bayesian approach to uncertain probabilities. In this model, preferences for ambiguity pertain directly to probabilities such that attitude toward ambiguity is defined as attitude toward mean-preserving spreads in...

Beliefs are a central determinant of behavior. Recent models assume that beliefs about or the anticipation of future consumption have direct utility-consequences. This gives rise to informational preferences, i.e., preferences over the timing and structure of information. Using a novel and...

This paper extends our earlier work on reverse Bayesianism by relaxing the assumption that decision makers abide by expected utility theory, assuming instead weaker axioms that merely imply that they are probabilistically sophisticated. We show that our main results, namely, (modified)...

Elicitation procedures (e.g., choice, valuation, matching, joint/separate evaluation) may generate reversed preferences between alternatives. Yet procedure-dependent preferences can be endogenous. When attribute importance is imperfectly known, people can engage in costly information...