Revealed ambiguity and its consequences

updating

P. Ghirardato

F. Maccheroni

M. Marinacci

pp. 3-18

in: Mohammed Abdellaoui, John D. Hey (eds), Advances in decision making under risk and uncertainty, Berlin, Springer, 2008

Abstract

Dynamic consistency is a fundamental property in dynamic choice models. It requires that if a decision maker plans to take some action at some juncture in the future, he should consistently take that action when finding himself at that juncture, and vice versa if he plans to take a certain action at a certain juncture, he should take that plan in mind when deciding what to do now.