The paradox of the Bayesian experts and state-dependent utility theory
When n individuals satisfy the axioms of subjective expected utility (SEU) theory and these individuals' probabilities or/and utilities are sufficiently diverse, it is impossible to aggregate the individuals' preferences into a (n + 1)-preference which is both Paretian and in agreement with SEU theory. The paper restates this paradox in the framework of Anscombe and Aumann's axiomatization of SEU and investigates the consequences of relaxing their state-independence assumption. The paradox disappears from the pure state-dependent framework but reappears in a different form in a sophisticated variant of state-dependent utility theory which achieves the uniqueness of subjective probabilities. The paper compares this novel impossibility result with the earlier one. It concludes by discussing the foundations of the Pareto principle in both the ex ante and ex post versions.
(This abstract was borrowed from another version of this item.)
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||1997|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 33 1 34 25 60 63
Fax: 33 1 34 25 62 33
Web page: http://thema.u-cergy.fr
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- ZHOU, Lin, 1996. "Bayesian Utilitarianism," CORE Discussion Papers 1996011, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Bernard De Meyer & Philippe Mongin, 1995.
"A note on affine aggregation,"
Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers)
- De Meyer, B. & Mongin, P., . "A note on affine aggregation," CORE Discussion Papers RP 1136, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- DEÂ MEYER, Bernard & MONGINÂ , Philippe, 1994. "A Note on Affine Aggregation," CORE Discussion Papers 1994014, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Mark J. Schervish & Teddy Seidenfeld & Joseph B. Kadane, 1991. "Shared Preferences and State-Dependent Utilities," Management Science, INFORMS, vol. 37(12), pages 1575-1589, December.
- Mongin, P., .
"Consistent Bayesian aggregation,"
CORE Discussion Papers RP
1176, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Karni, E. & Schmeidler, D., 1991.
"On the Uniqueness of Subjective Probabilities,"
1-92, Tel Aviv - the Sackler Institute of Economic Studies.
- Karni, Edi, 1993. "A Definition of Subjective Probabilities with State-Dependent Preferences," Econometrica, Econometric Society, vol. 61(1), pages 187-98, January.
- F J Anscombe & R J Aumann, 2000. "A Definition of Subjective Probability," Levine's Working Paper Archive 7591, David K. Levine.
- Broome, John, 1990. "Bolker-Jeffrey Expected Utility Theory and Axiomatic Utilitarianism," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 477-502, July.
- Hammond, Peter J, 1981. "Ex-ante and Ex-post Welfare Optimality under Uncertainty," Economica, London School of Economics and Political Science, vol. 48(191), pages 235-50, August.
When requesting a correction, please mention this item's handle: RePEc:ema:worpap:97-15. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stefania Marcassa)
If references are entirely missing, you can add them using this form.