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Imprecision as an account of violations of independence and betweenness
Journal article   Open access   Peer reviewed

Imprecision as an account of violations of independence and betweenness

D.J. Butler and G. Loomes
Journal of Economic Behavior & Organization, Vol.80(3), pp.511-522
2011
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Abstract

In an earlier paper we put forward a model of imprecise preferences which accounted for various forms of preference reversal. In this paper we show that the same model can also explain the best-known violations of expected utility theory's axioms of independence and betweenness. It appears that a simple model of imprecise preferences can account for a broader range of anomalies than many of the more elaborate alternative theories developed to date.

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6 Social Sciences
6.122 Economic Theory
6.122.1287 Risk Preferences
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Economics
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Economics & Business
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