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Social and Behavioral Sciences Commons™
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Full-Text Articles in Social and Behavioral Sciences
Subjective Distributions, Itzhak Gilboa, David Schmeidler
Subjective Distributions, Itzhak Gilboa, David Schmeidler
Cowles Foundation Discussion Papers
A decision maker has to choose one of several random variables, with uncertainty known distributions. As a Bayesian she behaves as if she knew the distributions. In his paper we suggest an axiomatic derivation of these (subjective) distributions, which is much more economical than the derivations by de Finetti or Savage. They derive the whole joint distribution of all the available random variables.
A Derivation Of Expected Utility Maximization In The Context Of A Game, Itzhak Gilboa, David Schmeidler
A Derivation Of Expected Utility Maximization In The Context Of A Game, Itzhak Gilboa, David Schmeidler
Cowles Foundation Discussion Papers
A decision maker faces a decision problem, or a game against nature. For each probability distribution over the state of the world (nature’s strategies), she has a weak order over her acts (pure strategies). We formulate conditions on these weak orders guaranteeing that they can be jointly represented by expected utility maximization with respect to an almost-unique state-dependent utility, that is, a matrix assigning real numbers to act-state pairs. As opposed to a utility function that is derived in another context, the utility matrix derived in the game will incorporate all psychological or sociological determinants of well-being that result from …
Expected Utility Theory Without The Completeness Axiom, Juan Dubra, Fabio Maccheroni, Efe A. Ok
Expected Utility Theory Without The Completeness Axiom, Juan Dubra, Fabio Maccheroni, Efe A. Ok
Cowles Foundation Discussion Papers
We study axiomatically the problem of obtaining an expected utility representation for a potentially incomplete preference relation over lotteries by means of a set of von Neumann-Morgenstern utility functions. It is shown that, when the prize space is a compact metric space, a preference relation admits such a multi-utility representation provided that it satisfies the standard axioms of expected utility theory. Moreover, the representing set of utilities is unique in a well-defined sense.