IDEAS home Printed from https://ideas.repec.org/a/oup/restud/v60y1993i2p487-493..html
   My bibliography  Save this article

Savage's Axioms Usually Imply Violation of Strict Stochastic Dominance

Author

Listed:
  • Peter Wakker

Abstract

Contrary to common belief, Savage's axioms do not imply strict stochastic dominance. Instead, they usually involve violation of that. Violations occur as soon as the range of the utility function is rich enough, e.g. contains an interval, and the probability measure is, loosely speaking, "constructive". An example is given where all of Savage's axioms are satisfied, but still strict statewise monotonicity is violated: An agent is willing to exchange an act for another act that with certainty yields a strictly worse outcome. Thus book can be made against the agent. Weak stochastic dominance and weak statewise monotonicity are always satisfied, as well as strict stochastic dominance and strict statewise monotonicity when restricted to acts with finitely many outcomes.

Suggested Citation

  • Peter Wakker, 1993. "Savage's Axioms Usually Imply Violation of Strict Stochastic Dominance," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(2), pages 487-493.
    • Handle: RePEc:oup:restud:v:60:y:1993:i:2:p:487-493.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2307/2298069
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Thai Ha-Huy, 2019. "Savage's theorem with atoms," Documents de recherche 19-05, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    2. Kopylov, Igor, 2010. "Unbounded probabilistic sophistication," Mathematical Social Sciences, Elsevier, vol. 60(2), pages 113-118, September.
    3. Cappelen, Alexander W. & Kariv, Shachar & Sørensen, Erik Ø. & Tungodden, Bertil, 2014. "Is There a Development Gap in Rationality?," Discussion Paper Series in Economics 8/2014, Norwegian School of Economics, Department of Economics.
    4. Marc Fleurbaey, 2010. "Assessing Risky Social Situations," Journal of Political Economy, University of Chicago Press, vol. 118(4), pages 649-680, August.
    5. Syngjoo Choi & Shachar Kariv & Wieland M?ller & Dan Silverman, 2014. "Who Is (More) Rational?," American Economic Review, American Economic Association, vol. 104(6), pages 1518-1550, June.
    6. Aluma Dembo & Shachar Kariv & Matthew Polisson & John Quah, 2021. "Ever since Allais," IFS Working Papers W21/15, Institute for Fiscal Studies.
    7. Thomas Kourouxous & Thomas Bauer, 2019. "Violations of dominance in decision-making," Business Research, Springer;German Academic Association for Business Research, vol. 12(1), pages 209-239, April.
    8. Shalev, Jonathan, 1997. "Loss aversion in a multi-period model," Mathematical Social Sciences, Elsevier, vol. 33(3), pages 203-226, June.
    9. Chen, Daniel L. & Schonger, Martin, 2016. "Social preferences or sacred values? Theory and evidence of deontological motivations," TSE Working Papers 16-714, Toulouse School of Economics (TSE), revised Feb 2020.
    10. Kopylov, Igor, 2010. "Simple axioms for countably additive subjective probability," Journal of Mathematical Economics, Elsevier, vol. 46(5), pages 867-876, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:restud:v:60:y:1993:i:2:p:487-493.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/restud .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.