# An axiomatic approach to ε -contamination

Kiyohiko G. Nishimura, Hiroyuki Ozaki

Research output: Contribution to journalArticle

27 Citations (Scopus)

### Abstract

Suppose that an economic agent is (1-\varepsilon) \times 100% certain that uncertainty she faces is characterized by a particular probability measure, but that she has a fear that, with \varepsilon \times 100% chance, her conviction is completely wrong and she is left perfectly ignorant about the true measure in the present as well as in the future. This situation is often called " varepsilon -contamination of confidence." The purpose of this paper is to provide a simple set of behavioral axioms under which the decision-maker's preference is represented by the Choquet expected utility with the varepsilon -contamination of confidence.

Original language English 333-340 8 Economic Theory 27 2 https://doi.org/10.1007/s00199-004-0584-3 Published - 2006 Feb 1

### Keywords

• Choquet expected utility
• Representation theorem
• ε-contamination

### ASJC Scopus subject areas

• Economics and Econometrics