Expected utility without utility
AbstractThis paper advances an interpretation of Von Neumann–Morgenstern’s expected utility model for preferences over lotteries which does not require the notion of a cardinal utility over prizes and can be phrased entirely in the language of probability. According to it, the expected utility of a lottery can be read as the probability that this lottery outperforms another given independent lottery. The implications of this interpretation for some topics and models in decision theory are considered.
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Bibliographic InfoPaper provided by EconWPA in its series Game Theory and Information with number 0508004.
Length: 16 pages
Date of creation: 08 Aug 2005
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expected utility; cardinal utility; benchmark; risk attitude; stochastic dominance;
Find related papers by JEL classification:
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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