Economic Theory

, Volume 64, Issue 1, pp 121–137 | Cite as

Purely subjective variational preferences

  • Craig S. WebbEmail author
Research Article


Variational preferences (Maccheroni et al. in Econometrica 74:1447–1498, 2006) are an important class of ambiguity averse preferences, compatible with Ellsberg-type phenomena. In this paper, a new foundation for variational preferences is derived in a framework of two stages of purely subjective uncertainty. A similar foundation is obtained for purely subjective maxmin expected utility (Gilboa and Schmeidler in J Math Econ 18:141–153, 1989). By establishing their axiomatic foundations without the use of extraneous probabilities, the conceptual appeal and applicability of these ambiguity models is enhanced.


Variational preferences Ambiguity aversion Subjective uncertainty 

JEL Classification




I am grateful for the comments of an anonymous reviewer. The usual disclaimer applies.


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© Springer-Verlag Berlin Heidelberg 2016

Authors and Affiliations

  1. 1.Economics, School of Social SciencesThe University of ManchesterManchesterUK

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