COARSE CONTINGENCIES

The paper considers an agent who must choose an action today under uncertainty about the consequence of any chosen action but without having in mind a complete list of all the contingencies that could in‡uence outcomes. She conceives of some relevant (subjective) contingencies but she is aware that these contingencies are coarse they leave out some details that may a¤ect outcomes. Though she may not be able to describe these …ner details, she is aware that they exist and this may a¤ect her behavior. Epstein and Seo are at Department of Economics, University of Rochester, Rochester, NY 14627, lepn@troi.cc.rochester.edu, kseo@troi.cc.rochester.edu. Marinacci is at Dipartimento di Statistica e Matematica Applicata and Collegio Carlo Alberto, Università di Torino, Italy, massimo.marinacci@unito.it. Epstein gratefully acknowledges the …nancial support of the NSF (award SES-0611456) and Marinacci that of the Ministero dell’Istruzione, dell’Università e della Ricerca. We are grateful also to two referees, seminar audiences at Chicago and Olin, Fabio Maccheroni, Luigi Montrucchio, and especially Bart Lipman and Todd Sarver for helpful comments and discussions. This supersedes a paper with the same title by Epstein and Marinacci; the main innovation here is to provide foundations for our second model see Section 4, particularly Theorem 4.1.

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