The Econometric SocietyEdited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
Econometrica: Mar, 2007, Volume 75, Issue 2
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.
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.
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.
