Subjectively Expected State-Independent Utility on State-Dependent Consequence Domains
August 1997 The standard decision theories of Savage and of Anscombe and Aumann both postulate that the domain of consequences is state independent. But this hypothesis makes no sense when, for instance, there is a risk of death or serious injury. The paper considers one possible way of deriving subjective probabilities and utilities in this case also. Moreover, the utilities will be state independent in the sense of giving equal value to any consequence that happens to occur in more than one state dependent consequence domain. The key is to consider decision trees having ``hypothetical" probabilities attached to states of nature, and even to allow hypothetical choices of these probabilities.
|Date of creation:||Aug 1997|
|Date of revision:|
|Contact details of provider:|| Postal: Ralph Landau Economics Building, Stanford, CA 94305-6072|
Web page: http://www-econ.stanford.edu/econ/workp/
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.:
- Blume, Lawrence & Brandenburger, Adam & Dekel, Eddie, 1991.
"Lexicographic Probabilities and Choice under Uncertainty,"
Econometric Society, vol. 59(1), pages 61-79, January.
- Lawrence Blume & Adam Brandenburger & Eddie Dekel, 2014. "Lexicographic Probabilities and Choice Under Uncertainty," World Scientific Book Chapters, in: The Language of Game Theory Putting Epistemics into the Mathematics of Games, chapter 6, pages 137-160 World Scientific Publishing Co. Pte. Ltd..
- Karni, Edi, 1993. "A Definition of Subjective Probabilities with State-Dependent Preferences," Econometrica, Econometric Society, vol. 61(1), pages 187-98, January.
- Karni, Edi & Schmeidler, David & Vind, Karl, 1983. "On State Dependent Preferences and Subjective Probabilities," Econometrica, Econometric Society, vol. 51(4), pages 1021-31, July.
- Mongin, Philippe, 1998.
"The paradox of the Bayesian experts and state-dependent utility theory,"
Journal of Mathematical Economics,
Elsevier, vol. 29(3), pages 331-361, April.
- MONGIN, Philippe, . "The paradox of the Bayesian experts and state-dependent utility theory," CORE Discussion Papers RP 1312, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- MONGIN, Philippe, 1996. "The Paradox of the Bayesian Experts and State-Dependent Utility Theory," CORE Discussion Papers 1996026, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- P. Mongin., 1997. "The paradox of the Bayesian experts and state-dependent utility theory," THEMA Working Papers 97-15, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Karni, Edi & Schmeidler, David, 1991. "Utility theory with uncertainty," Handbook of Mathematical Economics, in: W. Hildenbrand & H. Sonnenschein (ed.), Handbook of Mathematical Economics, edition 1, volume 4, chapter 33, pages 1763-1831 Elsevier.
- Karni Edi, 1993. "Subjective Expected Utility Theory with State-Dependent Preferences," Journal of Economic Theory, Elsevier, vol. 60(2), pages 428-438, August.
- Hammond, P.J. & , ., 1987. "Consequentialist foundations for expected utility," CORE Discussion Papers 1987016, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Roger B. Myerson, 1978. "An Axiomatic Derivation of Subjective Probability," Discussion Papers 338, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Machina, Mark J, 1987. "Choice under Uncertainty: Problems Solved and Unsolved," Journal of Economic Perspectives, American Economic Association, vol. 1(1), pages 121-54, Summer.
When requesting a correction, please mention this item's handle: RePEc:wop:stanec:97024. 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: (Thomas Krichel)
If references are entirely missing, you can add them using this form.