Preferences Under Ignorance

17 Pages Posted: 20 Feb 2019

See all articles by Olivier Gossner

Olivier Gossner

Ecole Polytechnique, Paris; London School of Economics & Political Science (LSE)

Christoph Kuzmics

University of Graz - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: February 2019

Abstract

A decision maker (DM) makes choices from different sets of alternatives. The DM is initially ignorant of the payoff associated with each alternative and learns these payoffs only after a large number of choices have been made. We show that, in the presence of an outside option, once payoffs are learned, the optimal choice rule from sets of alternatives can be rationalized by a DM with strict preferences over all alternatives. Under this model, the DM has preferences for preferences while being ignorant of what preferences are “right.”

Suggested Citation

Gossner, Olivier and Kuzmics, Christoph, Preferences Under Ignorance (February 2019). International Economic Review, Vol. 60, Issue 1, pp. 241-257, 2019, Available at SSRN: https://ssrn.com/abstract=3335304 or http://dx.doi.org/10.1111/iere.12351

Olivier Gossner (Contact Author)

Ecole Polytechnique, Paris ( email )

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London School of Economics & Political Science (LSE) ( email )

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Christoph Kuzmics

University of Graz - Department of Economics ( email )

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RESOWI - F4
Graz, 8010
Austria

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