## Abstract

*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.

## Keywords

Variational preferences Ambiguity aversion Subjective uncertainty## JEL Classification

D81## Notes

### Acknowledgments

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

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