Econometrica: Mar 2007, Volume 75, Issue 2

Representing Preferences with a Unique Subjective State Space: A Corrigendum

https://doi.org/10.1111/j.1468-0262.2006.00759.x
p. 591-600

Eddie Dekel, Barton L Lipman, Aldo Rustichini, Todd Sarver

Dekel, Lipman and Rustichini (2001) (henceforth DLR) axiomatically characterized three representations of preferences that allow for a desire for flexibility and/or commitment. In one of these representations (ordinal expected utility), the independence axiom is stated in a weaker form than is necessary to obtain the representation; in another (additive expected utility), the continuity axiom is too weak. In this erratum we provide examples showing that the axioms used by DLR are not sufficient, and provide stronger versions of these axioms that, together with the other axioms used by DLR, are necessary and sufficient for these two representations.

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Supplemental Material

Representing Preferences with a Unique Subjective State Space: Corrigendum: Supplementary Appendix

In Section 1, we define our axioms and the additive EU representation, and we state the corrected version of Theorem 4.A of Dekel, Lipman, and Rustichini (2001, henceforth DLR (2001)). In Section 2, we provide a complete and almost entirely self?contained proof of this representation theorem.

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