Objective rationality foundations for (dynamic) α-MEU

We show how incorporating Gilboa et al.'s (2010) notion of objective rationality into the α-MEU model choice under ambiguity can overcome several challenges faced by baseline without rationality. The decision-maker (DM) has a subjectively rational preference ≿∧, which captures complete ranking over acts DM expresses when forced to make choice; in addition, we endow with (possibly incomplete) objectively ≿⁎, rankings deems uncontroversial. Under founded model, ≿∧ an representation and ≿⁎ unanimity à la Bewley (2002), where both representations feature same utility index set beliefs. While axiomatic foundations are still not fully understood, provide simple characterization its counterpart. Moreover, contrast parameters uniquely identified. Finally, for prior-by-prior Bayesian updating while that, standard rules be ill-defined.