Theoretical Economics, Volume 2, Number 4 (December 2007)

Theoretical Economics 2 (2007), 355–394


Coarse contingencies and ambiguity

Larry G. Epstein, Massimo Marinacci, Kyoungwon Seo

Abstract


The paper considers an agent who must choose an action today under uncertainty about the consequence of any chosen action but without having in mind a complete list of all the contingencies that could in‡fluence outcomes. She conceives of some relevant (subjective) contingencies but she is aware that these contingencies are coarse---they leave out some details that may affect outcomes. Though she may not be able to describe these finer details, she is aware that they exist and this may affect her behavior.

Keywords: Uncertainty, states of the world, ambiguity, coarse contingencies

JEL classification: D81

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