Lexicographic expected utility with a subjective state space

摘要

This paper provides a model that allows for a criterion of admissibil-ity based on a subjective state space. For this purpose, we build a non-Archimedean model of preference with subjective states, generalizing Blume et al. (Econometrica 59:61-79,1991), who present a non-Archimedean model with exogenous states; and Dekel et al. (Econometrica 69:891-934, 2001), who present an Archimedean model with an endogenous state space. We interpret the representation as modeling an agent who has several "hypotheses" about her state space, and who views some as "infinitely less relevant" than others.