Lexicographic Preferences Induced in Asymmetric Information Environments

Debora Di Caprio; Francisco J. Santos-Arteaga

doi:10.26713/cma.v1i1.106

Authors

Debora Di Caprio Department of Mathematics and Statistics, York University, 4700 Keele Street, Toronto, Canada M3J 1P3; and School of Economics and Management, Free University of Bozen-Bolzano, Via Sernesi 1, 39100 Bolzano
Francisco J. Santos-Arteaga RINEI, Universidad Complutense de Madrid, Campus de Somosaguas, 28223 Pozuelo, Spain; and School of Economics and Management, Free University of Bozen-Bolzano, Via Sernesi 1, 39100 Bolzano

DOI:

https://doi.org/10.26713/cma.v1i1.106

Keywords:

Utility function, Additive preference, Lexicographic preference, Incomplete information, Info-multifunction, preference manipulation

Abstract

The current paper derives from a purely set-theoretical approach to the problem of strategic information transmission between an informed sender and an uninformed decision maker. The information provided by the sender is encoded in a multifunction that forces the decision maker to behave according to the preference relation induced by the encoded information. The main purpose of the paper is to study sufficient conditions for an information multifunction to alter an originally given additive preference relation of a decision maker and induce a lexicographic one. In doing so, we build several examples of sets of multifunctions inducing additive and lexicographic preferences.

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