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Co-authored with Edi Karni, John Hopkins University
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Abstract:
Decisions under uncertainty may result in new, unanticipated, consequences. Decision makers may be aware of being unaware of possible consequences of their decisions and take it into account when choosing among alternative courses of action. Decision makers' attitudes toward encountering unanticipated consequences is reflected in their choice behavior. This paper proposes, for the first time, measures of the attitudes toward unawareness, thereby filling a lacuna in the literature on decision making under uncertainty and awareness of unawareness.
Bio:
Marie-Louise Vierø (PhD Cornell University, 2006) is Professor of Economics at Aarhus University. Previously, she was faculty at Queen’s University in Canada. Her research area is decision theory and microeconomic theory. She has particular focus on modeling unawareness and growing awareness, where she has introduced and developed what is termed the “reverse Bayesianism” framework. Another line of research models behavior when decisions are based on vague information and investigates optimal design of contracts in such environments. Other papers investigate problems in finance or the behavior of researchers. Her papers are published in journals such as American Economic Review, Journal of Economic Theory, American Economic Journal: Microeconomics, and others.