Journal article
Probabilistic subjective expected utility
Journal of Mathematical Economics, Vol.48(1), pp.47-50
2012
Abstract
This paper develops the first model of probabilistic choice under subjective uncertainty (when probabilities of events are not objectively known). The model is characterized by seven standard axioms (probabilistic completeness, weak stochastic transitivity, nontriviality, event-wise dominance, probabilistic continuity, existence of an essential event, and probabilistic independence) as well as one new axiom. The model has an intuitive econometric interpretation as a Fechner model of (relative) random errors. The baseline model is extended from binary choice to decisions among m> 2 alternatives using a new method, which is also applicable to other models of binary choice.
Details
- Title
- Probabilistic subjective expected utility
- Authors/Creators
- P.R. Blavatskyy (Author/Creator) - A-6020, Austria
- Publication Details
- Journal of Mathematical Economics, Vol.48(1), pp.47-50
- Publisher
- Elsevier
- Identifiers
- 991005543272507891
- Copyright
- © 2011 Elsevier B.V.
- 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
- Economics
- Mathematics, Interdisciplinary Applications
- Social Sciences, Mathematical Methods
- ESI research areas
- Economics & Business