We analyze the problem of the choice of a central bank constitution. We model the decision problem as a choice behind a veil of ignorance in which the policy maker only receives information about predicted behavior under different policies. The policy maker is informed about (probability distributions of) consumers’ behavior and the distribution of productivity…
Author: Hendrik Rommeswinkel
Procedural Mixture Spaces
Procedural Mixture Spaces This paper provides a representation theorem for procedural mixture spaces. Procedural mixture spaces are mixture spaces in which it is not necessarily true that a mixture of two identical elements yields the same element. Under the remaining standard assumptions of mixture spaces, the following representation theorem is proven; a rational, independent, and…
Conditionally Additive Utility
Quasi-Separable Preferences (formerly: Conditionally Additive Utility Representations) Advances in economic theory have made decision theoretic models increasingly complex. Utility functions often lack additive separability, which is a major obstacle for decision theoretic axiomatizations. We address this challenge by providing a representation theorem for utility functions of quasi-separable preferences of the form (u(x,y,z)=f(x,z) + g(y,z)) on…