Journal article
A Simple Behavioral Characterization of Subjective Expected Utility
Operations Research, Vol.61(4), pp.932-940
2013
Abstract
Subjective expected utility (Savage, 1954) is the most widely used model to represent preferences under uncertainty (when objective probabilities of events may not be known). This paper presents a new behavioral characterization (preference axiomatization) of subjective expected utility. It is shown that the tradeoff consistency condition of Wakker (1984; 1989) can be weakened to a simpler axiom, which is referred to as standard sequence invariance by Krantz et al. (1971, Section 6.11.2) and Wakker (1984). This result is derived both in the connected topology approach and the algebraic approach (when step-continuity is replaced with solvability and Archimedean axioms).
Details
- Title
- A Simple Behavioral Characterization of Subjective Expected Utility
- Authors/Creators
- P. Blavatskyy (Author/Creator)
- Publication Details
- Operations Research, Vol.61(4), pp.932-940
- Publisher
- INFORMS (Institute for Operations Research and Management Sciences)
- Identifiers
- 991005546366207891
- Copyright
- INFORMS
- Murdoch Affiliation
- Murdoch University
- Language
- English
- Resource Type
- Journal article
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- Citation topics
- 6 Social Sciences
- 6.122 Economic Theory
- 6.122.1287 Risk Preferences
- Web Of Science research areas
- Management
- Operations Research & Management Science
- ESI research areas
- Engineering