Preference for flexibility in infinite horizon problems
type: Item
instance of: scholarly article
title: Preference for flexibility in infinite horizon problems
zbMATH Open document ID: 1028.91015
author: Aldo Rustichini
published in: Economic Theory
publication date: 2004-01-27T00:00:00Z
review text: Flexibility is the luxury of a second thought, the ability of revising one's previous plans, or even leaving them vague, until the time to choose comes. The author considers the extension of the classical problem of preference for flexibility to many periods. Preferences are defined over sets of infinite paths of choices. The main result provides a set of axioms on preferences that yield an additive representation over a subjective state space. This space is the set of preferences over choice today and feasible set tomorrow. The main new axiom, stochastic dominance, is a stronger form of the assumption of monotonicity.
Mathematics Subject Classification ID: 91B08
zbMATH DE Number: 1850395
zbMATH Keywords: preference for flexibility
zbMATH Keywords: unforeseen contingencies
zbMATH Keywords: dynamic programming
MaRDI profile type: Publication
full work available at URL: s00199-002-0255-1
OpenAlex ID: W2069202094
DOI: 10.1007/S00199-002-0255-1
description: scientific article; zbMATH DE number 1850395