Conditioning and Aggregation of Preferences
This paper contains a formulation of conditional preferences and their aggregation across states of nature and time that is consistent with, but does not imply, an expected utility representation of preferences, state-independence, or consequentialism. Under weak consistency conditions, the conditional utility of an act given certain information is related to the conditional utility of the same act given some coarser information through a (not necessarily additive) map, called an "aggregator." Sufficient conditions for additive aggregation are developed, based on standard theory of additive conjoint measurement. In an temporal setting, a "tie-coherence" axiom links conditional utilities and aggregators across time, providing the foundation for various forms of recursive utility. The general theory of conditioning and aggregation of preferences is applied to derive additive and recursive utility representations of preferences for information. The associated concept of information affinity (or aversion) is defined and related to recursive utility.
|Date of creation:||Feb 1991|
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