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A Behavioral Definition of States of the World

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  • Vassili Vergopoulos

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

This paper elaborates an axiomatic treatment of the Subjective Expected Utility (SEU) model that dispenses with the assumption of an exogenous state space. Within a state-free description of uncertainty and alternatives, axioms for preferences are formulated and shown to characterize the existence of a subjective state space, a subjective probability and a utility function. In the representation, the individual appears to behave as if he used the state space to describe uncertainty and maximized SEU to make decisions. Moreover, the state space, probability and utility are unique in some appropriate sense.

Suggested Citation

  • Vassili Vergopoulos, 2014. "A Behavioral Definition of States of the World," Post-Print halshs-01021388, HAL.
    • Handle: RePEc:hal:journl:halshs-01021388
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01021388
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    References listed on IDEAS

    as
    1. Kopylov, Igor, 2007. "Subjective probabilities on "small" domains," Journal of Economic Theory, Elsevier, vol. 133(1), pages 236-265, March.
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    More about this item

    Keywords

    expected utility; subjective state space; causality; consequentialism; espérance d'utilité; espace subjectif d'états; causalité; conséquentialisme;
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