This paper utilizes a Banach-type fixed point theorem in a functorial context to develop Universal Choice Spaces for addressing decision problems, focusing on expected utility and preference uncertainty. This generates an infinite sequence of optimal selection problems involving probability measures on utility sets. Each solution at a given stage addresses the preference ambiguity from the previous stage, enabling optimal choices at that level. The Universal Choice Space is characterized as a collection of finite-dimensional vectors of probability distributions, with the mth component being an arbitrary probability measure relevant to the mth stage of the problem. The space is derived as the canonical fixed point of a suitable endofunctor on an enriched category and simultaneously as the colimit of the sequence of iterations of this functor, starting from a suitable object.
QED Working Paper Number
1534
JEL Codes
Keywords
Expected utility
ambiguity of preferences
infinite regress
enriched category
endofunctor
canonical fixed point
initial algebra
colimit
universal choice space
Working Paper