A Derivation of Expected Utility Maximization in the Context of a Game
AbstractA 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 the very fact that the outcomes are obtained in a given game.
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Bibliographic InfoPaper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 1342.
Length: 23 pages
Date of creation: Dec 2001
Date of revision:
Publication status: Published in Games and Economic Behavior (July 2003), 44(1): 172-182
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Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
Other versions of this item:
- Gilboa, Itzhak & Schmeidler, David, 2003. "A derivation of expected utility maximization in the context of a game," Games and Economic Behavior, Elsevier, vol. 44(1), pages 172-182, July.
- Gilboa, I. & Schmeidler, D., 2001. "A Derivation of Expected Utility Maximization in the Context of a Game," Papers 2001-18, Tel Aviv.
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
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- O’Callaghan, Patrick, 2011. "Context and Decision: Utility on a Union of Mixture Spaces," The Warwick Economics Research Paper Series (TWERPS) 973, University of Warwick, Department of Economics.
- O'Callaghan, Patrick, 2013. "Ordinal, nonlinear context dependence," Risk and Sustainable Management Group Working Papers 152450, University of Queensland, School of Economics.
- Azrieli, Yaron, 2011. "Axioms for Euclidean preferences with a valence dimension," Journal of Mathematical Economics, Elsevier, vol. 47(4-5), pages 545-553.
- Castillo, Marco E. & Cross, Philip J., 2008. "Of mice and men: Within gender variation in strategic behavior," Games and Economic Behavior, Elsevier, vol. 64(2), pages 421-432, November.
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