On money pumps

Cubitt, Robin P. and Sugden, Robert (2001) On money pumps. Games and Economic Behavior, 37 (1). pp. 121-160. ISSN 0899-8256

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The question of whether money pump arguments justify standard consistency assumptions about behavior has remained unresolved, partly because of the absence of an appropriate analytical framework. We present a new framework which fills this gap, provide a formal definition of invulnerability to money pumps, and formulate a requirement of maximal opportunism. We show that behavior which satisfies none of the standard consistency assumptions can be both invulnerable and maximally opportunist. We present two conditions which, combined with maximal opportunism, imply the existence of a choice function rationalized by an ordering and satisfying the sure thing principle.

Item Type: Article
Faculty \ School: Faculty of Social Sciences
Faculty of Social Sciences > School of Economics
UEA Research Groups: Faculty of Social Sciences > Research Groups > Economic Theory
Faculty of Social Sciences > Research Groups > Behavioural Economics
Faculty of Social Sciences > Research Centres > Centre for Competition Policy
Faculty of Social Sciences > Research Centres > Centre for Behavioural and Experimental Social Sciences
Depositing User: Vishal Gautam
Date Deposited: 01 Jan 0010
Last Modified: 22 Apr 2023 23:47
URI: https://ueaeprints.uea.ac.uk/id/eprint/16730
DOI: 10.1006/game.2000.0834

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