Springer Nature is making SARS-CoV-2 and COVID-19 research free. View research | View latest news | Sign up for updates

Indecisiveness aversion and preference for commitment

  • 157 Accesses

  • 4 Citations

Abstract

We present an axiomatic model of preferences over menus that is motivated by three assumptions. First, the decision maker is uncertain ex ante (i.e., at the time of choosing a menu) about her ex post (i.e., at the time of choosing an option within her chosen menu) preferences over options, and she anticipates that this subjective uncertainty will not resolve before the ex post stage. Second, she is averse to ex post indecisiveness (i.e., to having to choose between options that she cannot rank with certainty). Third, when evaluating a menu she discards options that are dominated (i.e., inferior to another option whatever her ex post preferences may be) and restricts attention to the undominated ones. Under these assumptions, the decision maker has a preference for commitment in the sense of preferring menus with fewer undominated alternatives. We derive a representation in which the decision maker’s uncertainty about her ex post preferences is captured by means of a subjective state space, which in turn determines which options are undominated in a given menu, and in which the decision maker fears, whenever indecisive, to choose an option that will turn out to be the worst (undominated) one according to the realization of her ex post preferences.

This is a preview of subscription content, log in to check access.

References

  1. Debreu G. (1954) Representation of a preference ordering by a numerical function. In: Thrall R., Coombs C., Davis R. (eds) Decision processes. Wiley, London

  2. Dekel E., Lipman B. L., Rustichini A. (2001) Representing preferences with a unique subjective state space. Econometrica 69(4): 891–934

  3. Dekel E., Lipman B. L., Rustichini A. (2009) Temptation-driven preferences. Review of Economic Studies 76(3): 937–971

  4. Dekel E., Lipman B. L., Rustichini A., Sarver T. (2007a) Representing preferences with a unique subjective state space: A corrigendum. Econometrica 75: 591–600

  5. Dekel, E., Lipman, B. L., Rustichini, A., & Sarver, T. (2007b). Supplement to representing preferences with a unique subjective state space: Corrigendum, Econometrica Supplementary Material, 75.

  6. Dubra J., Maccheroni F., Ok E.A. (2004) Expected utility theory without the completeness axiom. Journal of Economic Theory 115(1): 118–133

  7. Eliaz K., Ok E. A. (2006) Indifference or indecisiveness? Choice-theoretic foundations of incomplete preferences. Games and Economix Behavior 56(1): 61–86

  8. Epstein L., Marinacci M., Seo K. (2007) Coarse contingencies and ambiguity. Theoretical Economics 2: 355–394

  9. Ergin H., Sarver T. (2010) A unique costly contemplation representation. Econometrica 78(4): 1285–1339

  10. Guerdjikova A., Zimper A. (2008) Flexibility of choice versus reduction of ambiguity. Social Choice and Welfare 30: 507–526

  11. Gul F., Pesendorfer W. (2001) Temptation and self-control. Econometrica 69(6): 1403–1435

  12. Klein E., Thompson A. C. (1984) Theory of correspondences: Including applications to mathematical economics. Wiley, New York

  13. Kreps D. M. (1979) A representation theorem for preference for flexibility. Econometrica 47(3): 565–577

  14. Nehring K. (1999) Preference for flexibility in a Savage framework. Econometrica 67: 101–119

  15. Ortoleva, P. (2010). The price of flexibility: Towards a theory of thinking aversion. mimeo.

  16. Ozdenoren E. (2002) Completing the state space with subjective states. Journal of Economic Theory 105: 531–539

  17. Rockafellar R. T. (1970) Convex analysis. Princeton University Press, Princeton

  18. Sarver T. (2008) Anticipating regret: Why fewer options may be better. Econometrica 76: 263–305

  19. Schneider R. (1993) Convex bodies: The Brunn-Minkowski theory. Cambridge University Press, Cambridge

Download references

Author information

Correspondence to Eric Danan.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Danan, E., Guerdjikova, A. & Zimper, A. Indecisiveness aversion and preference for commitment. Theory Decis 72, 1–13 (2012). https://doi.org/10.1007/s11238-011-9254-7

Download citation

Keywords

  • Opportunity sets
  • Subjective uncertainty
  • Indecisiveness
  • Dominance

JEL Classification

  • D81