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Counterexamples to "Transitive Regret"

2024-06-14 · Yuan Chang, Shuo Li Liu

Theorem 1 in Bikhchandani & Segal (2011; Theoretical Economics) suggests that a complete, transitive, monotonic, and continuous preference is regret based if and only if it is expected utility. Their Proposition 1 suggests that transitivity and continuity of a regret-based preference implies an equivalence condition: if random variables $X$ and $Y$ have the same distribution, then $X\sim Y$. We give counterexamples to Proposition 1.

📄 PDF Abstract BibTeX arXiv:2407.00055

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