Abstract.
We show that range convexity of beliefs, a `technical' condition that appears naturally in axiomatizations of preferences in a Savage-like framework, imposes some unexpected restrictions when modelling ambiguity averse preferences. That is, when it is added to a mild condition, range convexity makes the preferences collapse to subjective expected utility as soon as they satisfy structural conditions that are typically used to characterize ambiguity aversion.
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Received: February 25, 2000; revised version: April 17, 2000
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Ghirardato, P., Marinacci, M. Range convexity and ambiguity averse preferences. Econ Theory 17, 599–617 (2001). https://doi.org/10.1007/PL00004118
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DOI: https://doi.org/10.1007/PL00004118