Abstract
Tiebreak rules are necessary for revealing indifference in non- sequential decisions. I focus on a preference relation that satisfies Ordering and fails Independence in the following way. Lotteries a and b are indifferent but the compound lottery 〈 0.5f, 0.5b〉 is strictly preferred to the compound lottery 〈0.5f, 0.5a〉. Using tiebreak rules the following is shown here: “In sequential decisions when backward induction is applied, a preference like the one just described must alter the preference relation between a and b at certain choice nodes, i.e., indifference between a and b is not stable.” Using this result, I answer a question posed by Rabinowicz (1997) concerning admissibility in sequential decisions when indifferent options are substituted at choice nodes.
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Seidenfeld, T. Substitution of indifferent options at choice nodes and admissibility: a reply to Rabinowicz. Theory and Decision 48, 305–310 (2000). https://doi.org/10.1023/A:1005056315776
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DOI: https://doi.org/10.1023/A:1005056315776