Rationality and Dynamic Consistency Under Risk and Uncertainty
85
the event E.
18
Each point
y
E
:=y
s
s∈E
∈Y
E
then represents a pattern of uncertain
consequences, given that E is known to occur. By definition, the event S is always
known to occur.
In dynamic decision problems, it is important to keep track of what event is known
to the decision maker at each stage. The relevant version of the ordinality hypothesis, in
fact, is that for each event
E⊆S
, there is a conditional preference ordering
E
given E defined
on the domain Y
E
. Thus, we shall need to consider the whole family
E
(
∅�=
E
⊆
S
)
of conditional preference orderings as E varies over all ...
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