Objective and Subjective Rationality in a Multiple Prior Model∗
نویسندگان
چکیده
A decision maker is characterized by two binary relations. The first reflects decisions that are rational in an “objective” sense: the decision maker can convince others that she is right in making them. The second relation models decisions that are rational in a “subjective” sense: the decision maker cannot be convinced that she is wrong in making them. We impose axioms on these relations that allow a joint representation by a single set of prior probabilities. It is “objectively rational” to choose f ∗We wish to thank Eyal Baharad, Erio Castagnoli, Eric Danan, Eddie Dekel, Gabi Gayer, Paolo Ghirardato, Al Klevorick, Dan Levin, Klaus Nehring, Efe Ok, and Ben Polak for comments and references. This project was supported by the Pinhas Sapir Center for Development and Israel Science Foundation Grants Nos. 975/03 and 355/06. †Tel-Aviv University, HEC, Paris, and Cowles Foundation, Yale University. [email protected] ‡Department of Decision Sciences, of Economics, DONDENA, and IGIER, Università Bocconi. [email protected] §Collegio Carlo Alberto, Università di Torino. [email protected] ¶Tel-Aviv University and The Ohio State University. [email protected]
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