Rubinstein2005-page147 - 12:18 master Sheet number 145 Page...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
October 21, 2005 12:18 master Sheet number 145 Page number 129 Review Problems 129 { A , B , L } , where A and B are prizes and L is the lottery which yields each of the prizes A and B with equal probability. Each member has a strict preference over the three alternatives that satisfies vNM assumptions. Show that there is a non-dictatorial social welfare function which satisfies the independence of irrelevant alternatives axiom (even the strict version I ) and the Pareto axiom ( Par ). Rec- oncile this fact with Arrow’s Impossibility Theorem. Problem 11 (Tel Aviv 2003. Based on Gilboa and Schmeidler 1995.) An agent must decide whether to do something, Y , or not to do it, N . A history is a sequence of results for past events in which the agent chose Y ; each result is either a success S or a failure F . For example, ( S , S , F , F , S ) is a history with five events in which the action was carried out. Two of them (events 3 and 4) ended in failure while the rest were successful. The decision rule
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Ask a homework question - tutors are online