ISSN:
1573-7187
Keywords:
Sequential decisions
;
Independence postulate
;
Ordering postulate
;
Admissibility
;
Indifference
Source:
Springer Online Journal Archives 1860-2000
Topics:
Sociology
,
Economics
Notes:
Abstract Tiebreak rules are necessary for revealing indifference in non- sequential decisions. I focus on a preference relation that satisfies Ordering and fails Independence in the following way. Lotteries a and b are indifferent but the compound lottery 〈 0.5f, 0.5b〉 is strictly preferred to the compound lottery 〈0.5f, 0.5a〉. Using tiebreak rules the following is shown here: “In sequential decisions when backward induction is applied, a preference like the one just described must alter the preference relation between a and b at certain choice nodes, i.e., indifference between a and b is not stable.” Using this result, I answer a question posed by Rabinowicz (1997) concerning admissibility in sequential decisions when indifferent options are substituted at choice nodes.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1023/A:1005056315776
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