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Rational Dynamic Choice and Expected Utility Theory

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  • Cubitt, Robin P

Abstract

This paper considers the normative status of the independence and ordering principles of expected utility theory. Preferences are defined in terms of choice and the two principles derived from restrictions on choice in sequential decision problems. The results extend and clarify important contributions by P. J. Hammond and E. F. McClennen. They show that it is different requirements on dynamic choice which rationalize independence and ordering respectively and illuminate their relationship to consequentialism. Copyright 1996 by Royal Economic Society.

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  • Cubitt, Robin P, 1996. "Rational Dynamic Choice and Expected Utility Theory," Oxford Economic Papers, Oxford University Press, vol. 48(1), pages 1-19, January.
  • Handle: RePEc:oup:oxecpp:v:48:y:1996:i:1:p:1-19
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    Cited by:

    1. Siniscalchi, Marciano, 2011. "Dynamic choice under ambiguity," Theoretical Economics, Econometric Society, vol. 6(3), September.
    2. Maria J. Ruiz Martos, 2017. "Individual Dynamic Choice Behaviour and the Common Consequence Effect," ThE Papers 17/01, Department of Economic Theory and Economic History of the University of Granada..
    3. Croson, Rachel T. A., 1999. "The Disjunction Effect and Reason-Based Choice in Games, , , , , , , , , , , , ," Organizational Behavior and Human Decision Processes, Elsevier, vol. 80(2), pages 118-133, November.
    4. John Hey & Massimo Paradiso., "undated". "Dynamic Choice and Timing-Independence: an experimental investigation," Discussion Papers 99/26, Department of Economics, University of York.
    5. Chris Starmer, 2000. "Developments in Non-expected Utility Theory: The Hunt for a Descriptive Theory of Choice under Risk," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 332-382, June.
    6. John Hey & Luca Panaccione, 2011. "Dynamic decision making: what do people do?," Journal of Risk and Uncertainty, Springer, vol. 42(2), pages 85-123, April.
    7. Guerrero, Ana M. & Herrero, Carmen, 2005. "A semi-separable utility function for health profiles," Journal of Health Economics, Elsevier, vol. 24(1), pages 33-54, January.
    8. Hammond, Peter J & Zank, Horst, 2013. "Rationality and Dynamic Consistency under Risk and Uncertainty," The Warwick Economics Research Paper Series (TWERPS) 1033, University of Warwick, Department of Economics.
    9. Maxim Pinkovskiy, 2009. "Rational Inattention and Choice Under Risk: Explaining Violations of Expected Utility Through a Shannon Entropy Formulation of the Costs of Rationality," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 37(1), pages 99-112, March.
    10. John D. Hey, 2005. "Do People (Want To) Plan?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(1), pages 122-138, February.

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