Incomplete preferences and the preference for flexibility

Abstract

Sometimes individual agents display in their decisions a preference for having more opportunities to choose from. In this paper this fact is interpreted from a preference for flexibility approach, which links with the hypothesis that there is some uncertainty or vagueness in the decision maker’s preferences. We define an asymmetric (but not necessarily transitive, or complete) preference on a finite universe of alternatives, X, to express that vagueness. Taking this preference as a reference, the notion of preference for flexibility is described by means of the axiomatic characterization of a class of binary relations over the possible subsets of X, which are interpreted as opportunity sets. Subsequently, we demonstrate the relationship between the results and the representation theorem of preference for flexibility proposed by Kreps [10]. Finally, it is shown how some special orderings of the related literature could be interpreted as elements of the class characterized here.