Benchmarking real-valued acts
AbstractA benchmarking procedure ranks real-valued acts by the probability that they outperform a benchmark B; that is, an act f is evaluated by means of the functional V(f) = P(f > B). Expected utility is a special case of benchmarking procedure, where the acts and the benchmark are stochastically independent. This paper provides axiomatic characterizations of preference relations that are representable as benchmarking procedures. The key axiom is the sure-thing principle. When the state space is infinite, different continuity assumptions translate into different properties of the probability P.
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Bibliographic InfoPaper provided by EconWPA in its series Microeconomics with number 0502001.
Length: 22 pages
Date of creation: 02 Feb 2005
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sure-thing principle; state-dependent expected utility; measure representation approach; target-based reasoning;
Other versions of this item:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-04-16 (All new papers)
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