Skip to main content

A note on consequentialism in a dynamic Savage framework: a comment on Ghirardato (2002)

Abstract

The relationship between subjective expected utility with Bayesian updating and dynamic properties of choice has been formalized in Ghirardato (Econ Theory 83–92, 2002). In such a setup, with preferences defined over functions from states to consequences as in Savage (The foundation of statistics, 1954), strong dynamic consistency implies consequentialism. More precisely, we show that Axiom 7 in Ghirardato (Econ Theory 83–92, 2002). is redundant or alternatively dynamic consistency can be weakened while retaining the results.

This is a preview of subscription content, access via your institution.

Notes

  1. 1.

    This corresponds to Axiom 2b in Ghirardato (2002).

  2. 2.

    If we were to enlarge the choice set and allow the decision maker to differentiate ex-ante between differently composed acts yielding the same consequences, the result would no longer obtain. Clearly, such preferences do not have an EU representation.

References

  1. Epstein, L.G., Le Breton, M.: Dynamically consistent beliefs must be bayesian. J. Eco. Theory 61(1), 1–22 (1993)

    MATH  Article  Google Scholar 

  2. Ghirardato, P.: Revisiting savage in a conditional world. Econ. Theory 20(1), 83–92 (2002)

    MATH  MathSciNet  Article  Google Scholar 

  3. Machina, M.J.: Dynamic consistency and non-expected utility models of choice under uncertainty. J. Econ. Literat. 27(4), 1622–1668 (1989)

    Google Scholar 

  4. Savage L.J.: The foundation of statistics. Wiley; Chapman & Hall, New York; London (1954)

  5. Siniscalchi, M.: Dynamic choice under ambiguity. Theor. Econ. 6(3), 379–421 (2011)

    MATH  MathSciNet  Article  Google Scholar 

Download references

Acknowledgments

We are grateful to Paolo Ghirardato and Nabil Al-Najjar for helpful comments.

Author information

Affiliations

Authors

Corresponding author

Correspondence to Franz Ostrizek.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Hubmer, J., Ostrizek, F. A note on consequentialism in a dynamic Savage framework: a comment on Ghirardato (2002). Econ Theory Bull 3, 265–269 (2015). https://doi.org/10.1007/s40505-014-0057-1

Download citation

Keywords

  • Dynamic consistency
  • Consequentialism
  • Subjective expected utility

JEL Classification

  • D81