Hidden actions and preferences for timing of resolution of uncertainty

We study preferences for timing of resolution of objective uncertainty in a menu-choice model with two stages of information arrival. We characterize a general class of utility representations called hidden action representations, which interpret an intrinsic preference for timing of resolution of uncertainty as if an unobservable action is taken between the resolution of the two periods of information arrival. These representations permit a richer class of preferences for timing than was possible in the model of Kreps and Porteus (1978) by incorporating a preference for flexibility. Our model contains several special cases where this hidden action can be given a novel economic interpretation, including a subjective-state-space model of ambiguity aversion and a model of costly contemplation.

• Publication year

  2015

• Venue

  Theoretical Economics

• Publication date

  2015-05-01

• Fields of study

  Economics

• Identifiers
  DOI 10.3982/TE1340
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

• Portfolio Selection Efficient Diversification Of Investments

  2016cited by this paper
• Temporal Resolution of Uncertainty and Recursive Models of Ambiguity Aversion

  2013cited by this paper
• The price of flexibility: Towards a theory of Thinking Aversion

  2013cited by this paper
• Preference for Flexibility and Random Choice

  2013influential reference
• An Efficient Dynamic Mechanism

  2013cited by this paper
• Optimal Reference Points and Anticipation

  2012cited by this paper
• Preference for Randomization and Ambiguity Aversion

  2011cited by this paper
• Preference for Randomization and Ambiguity Aversion

  2011cited by this paper
• The unique minimal dual representation of a convex function

  2010cited by this paper
• A Unique Costly Contemplation Representation

  2010influential reference
• AMBIGUITY AND SECOND-ORDER BELIEF

  2009influential reference
• Subjective states: A more robust model

  2009influential reference
• Temptation-Driven Preferences

  2009cited by this paper
• Axiomatic Foundations of Multiplier Preferences

  2009cited by this paper
• ANTICIPATING REGRET : WHY FEWER OPTIONS MAY BE BETTER

  2008influential reference
• Living with Risk

  2008cited by this paper
• Coarse contingencies and ambiguity

  2007influential reference
• Representing preferences with a unique subjective state space: A corrigendum

  2007cited by this paper
• Auctions and Information acquisition: Sealed-bid or Dynamic Formats?

  2007influential reference
• Dynamic variational preferences

  2006cited by this paper
• Ambiguity Aversion, Robustness, and the Variational Representation of Preferences

  2006cited by this paper
• Inter-temporal Preference for Flexibility and Risky Choice

  2006cited by this paper
• Intertemporal substitution, risk aversion and ambiguity aversion

  2005cited by this paper
• Random Expected Utility

  2005influential reference
• Exotic Preferences for Macroeconomists

  2004cited by this paper
• Costly Contemplation ∗

  2003influential reference
• Recursive multiple-priors

  2003cited by this paper
• Robust Control and Model Uncertainty

  2001cited by this paper
• Current Draft : 23 July 2000 An Empirical Analysis of Local Trader Profitability

  2000cited by this paper
• Risk-sensitive real business cycles☆

  2000cited by this paper
• Temporal Resolution of Uncertainty and Recursive Non‐expected Utility Models

  2000cited by this paper
• Temptation and Self‐Control

  1999cited by this paper
• Intrinsic Preference for Information

  1998cited by this paper
• PSYCHOLOGICAL EXPECTED UTILITY THEORY AND ANTICIPATORY FEELINGS * A

  1997cited by this paper
• A Unique Subjective State Space for Unforeseen Contingencies

  1997cited by this paper
• The random utility model with an infinite choice space

  1996cited by this paper
• Precautionary Savings and the Permanent Income Hypothesis

  1993cited by this paper
• Convex Bodies: The Brunn–Minkowski Theory: Minkowski addition

  1993influential reference
• Infinite dimensional analysis

  1993cited by this paper
• Substitution, Risk Aversion, and the Temporal Behavior of Consumption and Asset Returns: An Empirical Analysis

  1991cited by this paper
• Risk Aversion and the Temporal Behavior of Consumption and Asset Returns: A Theoretical Framework

  1989cited by this paper
• Maxmin Expected Utility with Non-Unique Prior

  1989cited by this paper
• Convex Functions, Monotone Operators and Differentiability

  1989cited by this paper
• Notes On The Theory Of Choice

  1988influential reference
• Temporal risk and the nature of induced preferences

  1984cited by this paper
• Infinite-Dimensional Optimization And Convexity

  1983cited by this paper
• Probability and Measure

  1980cited by this paper
• Temporal von neumann-morgenstern and induced preferences

  1979cited by this paper
• A REPRESENTATION THEOREM FOR "PREFERENCE FOR FLEXIBILITY"

  1979influential reference
• Individual Choice Behavior: A Theoretical Analysis

  1979cited by this paper
• Temporal Resolution of Uncertainty and Dynamic Choice Theory

  1978influential reference
• A representation theorem for finite random scale systems

  1978cited by this paper
• Geometric Functional Analysis and Its Applications

  1975cited by this paper
• Real Analysis

  1972cited by this paper
• The Effect of the Timing of Consumption Decisions and the Resolution of Lotteries on the Choice of Lotteries

  1972cited by this paper
• Utility Theory for Decision Making

  1971influential reference
• Convex Analysis: (pms-28)

  1970cited by this paper
• A Note on Uncertainty and Preferences in a Temporal Context

  1969cited by this paper
• A Geometric Duality Theorem with Economic Applications

  1967cited by this paper
• Individual Choice Behavior: A Theoretical Analysis.

  1960cited by this paper
• Portfolio Selection: Efficient Diversification of Investments

  1959cited by this paper
• Sur la fonction d’appui des ensembles convexes dans un espace localement convexe

  1955cited by this paper
• Auctions and Information Acquisition

  year unknowninfluential reference

• Randomization and ambiguity perception

  2025cites this paper
• Costly subjective learning

  2025cites this paper
• Costly learning under ambiguity

  2025cites this paper
• Dynamic Optimization with Timing Risk

  2024cites this paper
• Modeling the Modeler: A Normative Theory of Experimental Design

  2024cites this paper
• Adaptive preferences: An evolutionary model of non-expected utility and ambiguity aversion

  2024cites this paper
• Optimal and Efficient Auctions for the Gradual Procurement of Strategic Service Provider Agents

  2023cites this paper
• Preferences with Costly Bayesian Learning

  2021cites this paper
• Lipschitz Bernoulli Utility Functions

  2021cites this paper
• Uncertainty from the small to the large

  2021cites this paper
• Rationalizing the Ostriches: Prior-Dependent Information Attitudes and Prior-Dependent Utility Theory

  2019cites this paper
• An Evolutionary Perspective on Updating Risk and Ambiguity Preferences

  2019cites this paper
• Mood-driven choices and self-regulation

  2018cites this paper
• Anticipated stochastic choice

  2018cites this paper
• Rationally inattentive preferences and hidden information costs

  2017cites this paper
• Anticipated stochastic choice

  2017influential citation
• Rationally inattentive preferences and hidden information costs

  2017cites this paper
• Mixture-Averse Preferences and Heterogeneous Stock Market Participation

  2016cites this paper
• Costly information acquisition and the temporal resolution of uncertainty

  2015cites this paper
• How Much Would You Pay to Resolve Long-Run Risk?

  2014cites this paper
• Preference for Flexibility and Random Choice

  2013cites this paper
• Temporal Resolution of Uncertainty and Recursive Models of Ambiguity Aversion

  2013cites this paper