Hybrid decision model and the ranking of experiments

Edi Karni, Zvi Safra

Research output: Contribution to journalArticlepeer-review

Abstract

Departing from the reduction of compound lotteries axiom on multi-stage lotteries, this paper proposes a new hybrid model to analyze decision trees. Applied to multi-stage decision trees induced by experiments, Blackwell's (1953) definition of the relation “more informative” on the set of information structures is equivalent to experiments being more valuable to a class of non-expected utility preferences. This result extends Blackwell's theorem and provides new insights regarding the evaluation of information produced by experiments.

Original languageEnglish
Article number102700
JournalJournal of Mathematical Economics
DOIs
StateAccepted/In press - 2022
Externally publishedYes

Keywords

  • Blackwell's theorem
  • Comparison of experiments
  • Hybrid decision analysis
  • Reduction of compound lotteries
  • Value of information

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