The α-MEU model: A comment

The α-MEU model: A comment,10.1016/j.jet.2011.03.019,Journal of Economic Theory,Jürgen Eichberger,Simon Grant,David Kelsey,Gleb A. Koshevoy

The α-MEU model: A comment   (Citations: 1)
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In Ghirardato et al. (2004) [7], Ghirardato, Macheroni and Marinacci propose a method for distinguishing between perceived ambiguity and the decision-makerʼs reaction to it. They study a general class of preferences which they refer to as invariant biseparable. This class includes CEU and MEU. They axiomatize a subclass of α-MEU preferences. If attention is restricted to finite state spaces, we show that any α-MEU preference relation, satisfies GMMʼs axioms if and only ifα=0 or 1, that is, the preferences must be either maxmin or maxmax. We show by example that these axioms may be satisfied when the state space is [0,1].
Journal: Journal of Economic Theory - J ECON THEOR , vol. 146, no. 4, pp. 1684-1698, 2011
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    • ...also Eichberger, Grant, Kelsey, and Koshevoy [20] for an example of preferences which satisfy their axioms...
    • ...However as we show in Eichberger, Grant, Kelsey, and Koshevoy [20] there are problems with this approach, when the state space is …nite...

    Jürgen Eichbergeret al. OPTIMISM AND PESSIMISM IN GAMES

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