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Great expectations. Part II: Generalized expected utility as a universal decision rule

Author

Listed:
  • Francis C. Chu

    (Cornell University)

  • Joseph Y. Halpern

    (Cornell University)

Abstract

Many different rules for decision making have been introduced in the literature. We show that a notion of generalized expected utility proposed in 'Great Expectations. Part I' is a universal decision rule, in the sense that it can represent essentially all other decision rules.

Suggested Citation

  • Francis C. Chu & Joseph Y. Halpern, 2004. "Great expectations. Part II: Generalized expected utility as a universal decision rule," Game Theory and Information 0411004, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpga:0411004
    Note: Type of Document - pdf; pages: 21. Appears in Artificial Intelligence, vol. 159, numbers 1,2, 2004, pp. 207-230
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/game/papers/0411/0411004.pdf
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    References listed on IDEAS

    as
    1. Wakker, Peter P. & Zank, Horst, 2002. "A simple preference foundation of cumulative prospect theory with power utility," European Economic Review, Elsevier, vol. 46(7), pages 1253-1271, July.
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    4. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    5. Lehmann, Daniel, 2001. "Expected Qualitative Utility Maximization," Games and Economic Behavior, Elsevier, vol. 35(1-2), pages 54-79, April.
    6. Gilboa, Itzhak & Schmeidler, David, 1989. "Maxmin expected utility with non-unique prior," Journal of Mathematical Economics, Elsevier, vol. 18(2), pages 141-153, April.
    7. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    8. Fishburn, Peter C, 1987. "Reconsiderations in the Foundations of Decision under Uncertainty," Economic Journal, Royal Economic Society, vol. 97(388), pages 825-841, December.
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    Cited by:

    1. Francis Chu & Joseph Halpern, 2008. "Great Expectations. Part I: On the Customizability of Generalized Expected Utility," Theory and Decision, Springer, vol. 64(1), pages 1-36, February.
    2. Z Hua & S Li & Z Tao, 2006. "A rule-based risk decision-making approach and its application in China's customs inspection decision," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(11), pages 1313-1322, November.

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    More about this item

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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