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Stochastic models for risky choices: A comparison of different axiomatizations
Affiliation:1. LAMETA – INRA – CNRS – SupAgro-Univ. Montpellier, 2 place Viala, 34060 Montpellier, France;2. IESEG School of Management – LEM – CNRS, 3 rue de la Digue, 59000 Lille, France;3. CIRED–CNRS–EHESS–Ecole des Ponts ParisTech, 45 bis avenue de la Belle-Gabrielle, 94736 Nogent Sur Marne Cedex, France;1. Dipartimento di Scienze Economiche e Statistiche, University of Naples Federico II, Italy;2. Dipartimento di Studi Aziendali e Quantitativi, University of Naples Parthenope, Italy;1. University of Fribourg, Rue de Rome 1, CH-1700 Fribourg, Switzerland;2. University of Iceland, Sæmundargötu 2, 101 Reykjavík, Iceland;3. School of Humanities and Social Science, University of Newcastle, University Drive, Callaghan, NSW 2308, Australia;4. Fryske Akademy, PO Box 54, 8900 AB Ljouwert/Leeuwarden, The Netherlands;1. ORSTAT, KU Leuven, Belgium;2. Center for Economic Studies, KU Leuven, Belgium;3. ECARES, Université Libre de Bruxelles, Belgium;4. Fedex Express Europe, Middle East, Indian Subcontinent & Africa, Belgium
Abstract:For a long time researchers have recognized the need for applying stochastic models for analyzing data generated from agents’ choice under risk. This paper compares and discusses recent axiomatizations of stochastic models for risky choice given by Blavatskyy (2008) and Dagsvik (2008). We show that some of Blavatskyy’s axioms are equivalent to some of Dagsvik’s axioms. We also propose new axioms and derive their implications. Specifically, we show that some of the results of Dagsvik (2008) can be derived under weaker axioms than those he proposed originally.
Keywords:Stochastic choice under uncertainty  Random tastes  Bounded rationality  Independence from irrelevant alternatives
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