Results for 'expected utility theory'

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  1. Expected utility theory, Jeffrey’s decision theory, and the paradoxes.Philippe Mongin & Jean Baccelli - 2020 - Synthese 199 (1):695-713.
    In Richard Bradley’s book, Decision Theory with a Human Face, we have selected two themes for discussion. The first is the Bolker-Jeffrey theory of decision, which the book uses throughout as a tool to reorganize the whole field of decision theory, and in particular to evaluate the extent to which expected utility theories may be normatively too demanding. The second theme is the redefinition strategy that can be used to defend EU theories against the Allais (...)
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  2. Risk, Rationality and Expected Utility Theory.Richard Pettigrew - 2015 - Canadian Journal of Philosophy 45 (5-6):798-826.
    There are decision problems where the preferences that seem rational to many people cannot be accommodated within orthodox decision theory in the natural way. In response, a number of alternatives to the orthodoxy have been proposed. In this paper, I offer an argument against those alternatives and in favour of the orthodoxy. I focus on preferences that seem to encode sensitivity to risk. And I focus on the alternative to the orthodoxy proposed by Lara Buchak’s risk-weighted expected (...) theory. I will show that the orthodoxy can be made to accommodate all of the preferences that Buchak’s theory can accommodate. (shrink)
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  3.  8
    An Expected Utility Theory for State-Dependent Preferences.Edi Karni & David Schmeidler - 2016 - Theory and Decision 81 (4):467-478.
    This note is a generalization and improved interpretation of the main result of Karni and Schmeidler. A decision-maker is supposed to possess a preference relation on acts and another preference relation on state-prize lotteries, both of which are assumed to satisfy the von Neumann–Morgenstern axioms. In addition, the two preference relations restricted to a state of nature are assumed to agree. We show that these axioms are necessary and sufficient for the existence of subjective expected utility over acts (...)
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  4. Expected Utility Theory.Philippe Mongin - 1998 - In John Davis, Wade Hands & Uskali Maki (eds.), Handbook of Economic Methodology. Edward Elgar. pp. 342-350.
    The paper summarizes expected utility theory, both in its original von Neumann-Morgenstern version and its later developments, and discusses the normative claims to rationality made by this theory.
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  5.  98
    Expected Utility Theory Under Non-Classical Uncertainty.V. I. Danilov & A. Lambert-Mogiliansky - 2010 - Theory and Decision 68 (1-2):25-47.
    In this article, Savage’s theory of decision-making under uncertainty is extended from a classical environment into a non-classical one. The Boolean lattice of events is replaced by an arbitrary ortho-complemented poset. We formulate the corresponding axioms and provide representation theorems for qualitative measures and expected utility. Then, we discuss the issue of beliefs updating and investigate a transition probability model. An application to a simple game context is proposed.
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  6.  22
    Rationality, Expected Utility Theory and the Precautionary Principle.Andreas Christiansen - 2019 - Ethics, Policy and Environment 22 (1):3-20.
    ABSTRACTA common objection to the precautionary principle is that it is irrational. I argue that this objection goes beyond the often-discussed claim that the principle is incoherent. Instead, I argue, expected utility theory is the source of several more sophisticated irrationality charges against the precautionary principle. I then defend the principle from these objections by arguing that the relevant features of the precautionary principle are part of plausible normative theories, and that the precautionary principle does not diverge (...)
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  7.  13
    Subjectively Expected Utility Theory and Subjects' Probability Estimates: Use of Measurement-Free Techniques.Thomas S. Wallsten - 1971 - Journal of Experimental Psychology 88 (1):31.
  8. The Failure of Expected-Utility Theory as a Theory of Reason.Jean Hampton - 1994 - Economics and Philosophy 10 (2):195.
    Expected-utility theory has been a popular and influential theory in philosophy, law, and the social sciences. While its original developers, von Neumann and Morgenstern, presented it as a purely predictive theory useful to the practitioners of economic science, many subsequent theorists, particularly those outside of economics, have come to endorse EU theory as providing us with a representation of reason. But precisely in what sense does EU theory portray reason? And does it do (...)
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  9.  17
    Expected Utility Theory on Mixture Spaces Without the Completeness Axiom.David McCarthy, Kalle Mikkola & Joaquin Teruji Thomas - 2021 - arXiv:2102.06898 [Econ.TH].
    A mixture preorder is a preorder on a mixture space (such as a convex set) that is compatible with the mixing operation. In decision theoretic terms, it satisfies the central expected utility axiom of strong independence. We consider when a mixture preorder has a multi-representation that consists of real-valued, mixture-preserving functions. If it does, it must satisfy the mixture continuity axiom of Herstein and Milnor (1953). Mixture continuity is sufficient for a mixture-preserving multi-representation when the dimension of the (...)
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  10. Duhemian Themes in Expected Utility Theory.Philippe Mongin - 2009 - In Anastasios Brenner and Jean Gayon (ed.), French Studies in the Philosophy of Science. Springer. pp. 303-357.
    This monographic chapter explains how expected utility (EU) theory arose in von Neumann and Morgenstern, how it was called into question by Allais and others, and how it gave way to non-EU theories, at least among the specialized quarters of decion theory. I organize the narrative around the idea that the successive theoretical moves amounted to resolving Duhem-Quine underdetermination problems, so they can be assessed in terms of the philosophical recommendations made to overcome these problems. I (...)
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  11. Expected Utility Theory.Simon Grant & Timothy Van Zandt - 2009 - In Paul Anand, Prasanta Pattanaik & Clemens Puppe (eds.), Handbook of Rational and Social Choice. Oxford University Press.
     
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  12.  45
    Subjective Expected Utility Theory Revisited: A Reductio Ad Absurdum Paradox.Paul J. H. Schoemaker - 1992 - Theory and Decision 33 (1):1-21.
  13. Extensions of Expected Utility Theory and Some Limitations of Pairwise Comparisons.Teddy Seidenfeld - unknown
    We contrast three decision rules that extend Expected Utility to contexts where a convex set of probabilities is used to depict uncertainty: Γ-Maximin, Maximality, and E-admissibility. The rules extend Expected Utility theory as they require that an option is inadmissible if there is another that carries greater expected utility for each probability in a (closed) convex set. If the convex set is a singleton, then each rule agrees with maximizing expected utility. (...)
     
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  14.  99
    A Critique of Expected Utility Theory: Descriptive and Normative Considerations.Amos Tversky - 1975 - Erkenntnis 9 (2):163 - 173.
  15.  33
    The Sequential Dominance Argument for the Independence Axiom of Expected Utility Theory.Johan E. Gustafsson - 2021 - Philosophy and Phenomenological Research 103 (1):21-39.
    Independence is the condition that, if X is preferred to Y, then a lottery between X and Z is preferred to a lottery between Y and Z given the same probability of Z. Is it rationally required that one’s preferences conform to Independence? The main objection to this requirement is that it would rule out the alleged rationality of Allais and Ellsberg Preferences. In this paper, I put forward a sequential dominance argument with fairly weak assumptions for a variant of (...)
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  16.  26
    A Test of Generalized Expected Utility Theory.Barry Sopher & Gary Gigliotti - 1993 - Theory and Decision 35 (1):75-106.
  17.  56
    Economic Choice in Generalized Expected Utility Theory.John Quiggin - 1995 - Theory and Decision 38 (2):153-171.
  18.  34
    The Normative Decision Theory in Economics: A Philosophy of Science Perspective. The Case of the Expected Utility Theory.Magdalena Małecka - 2019 - Journal of Economic Methodology 27 (1):36-50.
    This article analyses how normative decision theory is understood by economists. The paradigmatic example of normative decision theory, discussed in the article, is the expected utility theory. It...
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  19.  35
    Rules of Behavior and Expected Utility Theory. Compatibility Versus Dependence.Ole Hagen - 1985 - Theory and Decision 18 (1):31-45.
  20.  78
    Subjective Expected Utility: A Review of Normative Theories. [REVIEW]Peter C. Fishburn - 1981 - Theory and Decision 13 (2):139-199.
  21.  24
    Discovered Preferences and the Experimental Evidence of Violations of Expected Utility Theory.Robin P. Cubitt, Chris Starmer & Robert Sugden - 2001 - Journal of Economic Methodology 8 (3):385-414.
    The discovered preference hypothesis appears to insulate expected utility theory (EU) from disconfirming experimental evidence. It asserts that individuals have coherent underlying preferences, which experiments may not reveal unless subjects have adequate opportunities and incentives to discover which actions best satisfy their preferences. We identify the confounding effects to be expected in experiments, were that hypothesis true, and consider how they might be controlled for. We argue for a design in which each subject faces just one (...)
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  22.  51
    A Normative Interpretation of Expected Utility Theory.Eric M. Cave - 2005 - Journal of Value Inquiry 39 (3-4):431-441.
  23.  39
    Reconciliation with the Utility of Chance by Elaborated Outcomes Destroys the Axiomatic Basis of Expected Utility Theory.Robin Pope - 2000 - Theory and Decision 49 (3):223-234.
    Expected utility theory does not directly deal with the utility of chance. It has been suggested in the literature (Samuelson, 1952, Markowitz, 1959) that this can be remedied by an approach which explicitly models the emotional consequences which give rise to the utility of chance. We refer to this as the elaborated outcomes approach. It is argued that the elaborated outcomes approach destroys the possibility of deriving a representation theorem based on the usual axioms of (...)
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  24. Production Under Uncertainty and Choice Under Uncertainty in the Emergence of Generalized Expected Utility Theory.John Quiggin - 2001 - Theory and Decision 51 (2/4):125-144.
    This paper presents a personal view of the interaction between the analysis of choice under uncertainty and the analysis of production under uncertainty. Interest in the foundations of the theory of choice under uncertainty was stimulated by applications of expected utility theory such as the Sandmo model of production under uncertainty. This interest led to the development of generalized models including rank-dependent expected utility theory. In turn, the development of generalized expected (...) models raised the question of whether such models could be used in the analysis of applied problems such as those involving production under uncertainty. Finally, the revival of the state-contingent approach led to the recognition of a fundamental duality between choice problems and production problems. (shrink)
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  25. ‘Risk in a Simple Temporal Framework for Expected Utility Theory and for SKAT, the Stages of Knowledge Ahead Theory’, Risk and Decision Analysis, 2(1), 5-32. Selten Co-Author.Robin Pope & Reinhard Selten - 2010/2011 - Risk and Decision Analysis 2 (1).
    The paper re-expresses arguments against the normative validity of expected utility theory in Robin Pope (1983, 1991a, 1991b, 1985, 1995, 2000, 2001, 2005, 2006, 2007). These concern the neglect of the evolving stages of knowledge ahead (stages of what the future will bring). Such evolution is fundamental to an experience of risk, yet not consistently incorporated even in axiomatised temporal versions of expected utility. Its neglect entails a disregard of emotional and financial effects on well-being (...)
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  26.  14
    Comparison Between the Health Belief Model and Subjective Expected Utility Theory: Predicting Incontinence Prevention Behaviour in Postpartum Women.Mary Dolman & Jonathan Chase - 1996 - Journal of Evaluation in Clinical Practice 2 (3):217-222.
  27. Production Under Uncertainty and Choice Under Uncertainty in the Emergence of Generalized Expected Utility Theory.John Quiggin - 2022 - Theory and Decision 92 (3-4):717-729.
    Interest in the foundations of the theory of choice under uncertainty was stimulated by applications of expected utility theory such as the Sandmo model of production under uncertainty. The development of generalized expected utility models raised the question of whether such models could be used in the analysis of applied problems such as those involving production under uncertainty. Finally, the revival of the state-contingent approach led to the recognition of a fundamental duality between choice (...)
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  28.  60
    Recursive Expected Utility and the Separation of Attitudes Towards Risk and Ambiguity: An Experimental Study. [REVIEW]Sujoy Chakravarty & Jaideep Roy - 2008 - Theory and Decision 66 (3):199-228.
    We use the multiple price list method and a recursive expected utility theory of smooth ambiguity to separate out attitude towards risk from that towards ambiguity. Based on this separation, we investigate if there are differences in agent behaviour under uncertainty over gain amounts vis-a-vis uncertainty over loss amounts. On an aggregate level, we find that (i) subjects are risk averse over gains and risk seeking over losses, displaying a “reflection effect” and (ii) they are ambiguity neutral (...)
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  29. Utilitarianism with and Without Expected Utility.David McCarthy, Kalle Mikkola & Joaquin Teruji Thomas - 2020 - Journal of Mathematical Economics 87:77-113.
    We give two social aggregation theorems under conditions of risk, one for constant population cases, the other an extension to variable populations. Intra and interpersonal welfare comparisons are encoded in a single ‘individual preorder’. The theorems give axioms that uniquely determine a social preorder in terms of this individual preorder. The social preorders described by these theorems have features that may be considered characteristic of Harsanyi-style utilitarianism, such as indifference to ex ante and ex post equality. However, the theorems are (...)
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  30. Consequentialist Foundations for Expected Utility.Peter J. Hammond - 1988 - Theory and Decision 25 (1):25-78.
    Behaviour norms are considered for decision trees which allow both objective probabilities and uncertain states of the world with unknown probabilities. Terminal nodes have consequences in a given domain. Behaviour is required to be consistent in subtrees. Consequentialist behaviour, by definition, reveals a consequence choice function independent of the structure of the decision tree. It implies that behaviour reveals a revealed preference ordering satisfying both the independence axiom and a novel form of sure-thing principle. Continuous consequentialist behaviour must be (...) utility maximizing. Other plausible assumptions then imply additive utilities, subjective probabilities, and Bayes' rule. (shrink)
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  31.  51
    A Mistaken Argument Against the Expected Utility Theory of Rationality.John Broome - 1985 - Theory and Decision 18 (3):313-318.
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    Lexicographic Expected Utility Without Completeness.D. Borie - 2016 - Theory and Decision 81 (2):167-176.
    Standard theories of expected utility require that preferences are complete, and/or Archimedean. We present in this paper a theory of decision under uncertainty for both incomplete and non-Archimedean preferences. Without continuity assumptions, incomplete preferences on a lottery space reduce to an order-extension problem. It is well known that incomplete preferences can be extended to complete preferences in the full generality, but this result does not necessarily hold for incomplete preferences which satisfy the independence axiom, since it may (...)
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  33. Expected Utility Without Utility.E. Castagnoli & M. Li Calzi - 1996 - Theory and Decision 41 (3):281-301.
  34. Normative Theories of Rational Choice: Expected Utility.Rachael Briggs - 2017 - The Stanford Encyclopedia of Philosophy.
  35. Expected Utility Consistent Extensions of Preferences.Burak Can, Bora Erdamar & M. Remzi Sanver - 2009 - Theory and Decision 67 (2):123-144.
    We consider the problem of extending a (complete) order over a set to its power set. The extension axioms we consider generate orderings over sets according to their expected utilities induced by some assignment of utilities over alternatives and probability distributions over sets. The model we propose gives a general and unified exposition of expected utility consistent extensions whilst it allows to emphasize various subtleties, the effects of which seem to be underestimated – particularly in the literature (...)
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  36. Why High-Risk, Non-Expected-Utility-Maximising Gambles Can Be Rational and Beneficial: The Case of HIV Cure Studies.Lara Buchak - 2016 - Journal of Medical Ethics (2):1-6.
    Some early phase clinical studies of candidate HIV cure and remission interventions appear to have adverse medical risk–benefit ratios for participants. Why, then, do people participate? And is it ethically permissible to allow them to participate? Recent work in decision theory sheds light on both of these questions, by casting doubt on the idea that rational individuals prefer choices that maximise expected utility, and therefore by casting doubt on the idea that researchers have an ethical obligation not (...)
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  37.  99
    Facts, Norms and Expected Utility Functions.Sophie Jallais, Pierre-Charles Pradier & David Teira - 2008 - History of the Human Sciences 21 (2):45-62.
    In this article we explore an argumentative pattern that provides a normative justification for expected utility functions grounded on empirical evidence, showing how it worked in three different episodes of their development. The argument claims that we should prudentially maximize our expected utility since this is the criterion effectively applied by those who are considered wisest in making risky choices (be it gamblers or businessmen). Yet, to justify the adoption of this rule, it should be proven (...)
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  38.  49
    Expected Utility From Additive Utility on Semigroups.Juan C. Candeal, Juan R. de Miguel & Esteban Induráin - 2002 - Theory and Decision 53 (1):87-94.
    In the present paper we study the framework of additive utility theory, obtaining new results derived from a concurrence of algebraic and topological techniques. Such techniques lean on the concept of a connected topological totally ordered semigroup. We achieve a general result concerning the existence of continuous and additive utility functions on completely preordered sets endowed with a binary operation ``+'', not necessarily being commutative or associative. In the final part of the paper we get some applications (...)
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  39.  49
    A Theory of Subjective Expected Utility with Vague Preferences.Peter C. Fishburn - 1975 - Theory and Decision 6 (3):287-310.
  40.  19
    Arrovian Aggregation of Generalised Expected-Utility Preferences: (Im)Possibility Results by Means of Model Theory.Frederik Herzberg - 2018 - Studia Logica 106 (5):947-967.
    Cerreia-Vioglio et al. :341–375, 2011) have proposed a very general axiomatisation of preferences in the presence of ambiguity, viz. Monotonic Bernoullian Archimedean preference orderings. This paper investigates the problem of Arrovian aggregation of such preferences—and proves dictatorial impossibility results for both finite and infinite populations. Applications for the special case of aggregating expected-utility preferences are given. A novel proof methodology for special aggregation problems, based on model theory, is employed.
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  41.  3
    The Minimax Theory and Expected-Utility Reasoning.Edward F. McClennen - 1978 - In A. Hooker, J. J. Leach & E. F. McClennen (eds.), Foundations and Applications of Decision Theory. D. Reidel. pp. 337--367.
  42. Epistemic Utility Theory’s Difficult Future.Chad Marxen - 2021 - Synthese 199 (3-4):7401-7421.
    According to epistemic utility theory, epistemic rationality is teleological: epistemic norms are instrumental norms that have the aim of acquiring accuracy. What’s definitive of these norms is that they can be expected to lead to the acquisition of accuracy when followed. While there’s much to be said in favor of this approach, it turns out that it faces a couple of worrisome extensional problems involving the future. The first problem involves credences about the future, and the second (...)
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  43. Expected Utility and Constrained Maximization: Problems of Compatibility. [REVIEW]Hans Lottenbach - 1994 - Erkenntnis 41 (1):37 - 48.
    In recent attempts at deriving morality from rationality expected utility theory has played a major role. In the most prominent such attempt, Gauthier'sMorals by Agreement, a mode of maximizing utility calledconstrained maximization is defended. I want to show that constrained maximization or any similar proposal cannot be coherently supported by expected utility theory. First, I point to an important implication of that theory. Second, I discuss the question of what the place of (...)
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  44. A Conditional Expected Utility Model for Myopic Decision Makers.Leigh Tesfatsion - 1980 - Theory and Decision 12 (2):185-206.
    An expected utility model of individual choice is formulated which allows the decision maker to specify his available actions in the form of controls (partial contingency plans) and to simultaneously choose goals and controls in end-mean pairs. It is shown that the Savage expected utility model, the Marschak- Radner team model, the Bayesian statistical decision model, and the standard optimal control model can be viewed as special cases of this goal-control expected utility model.
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  45.  31
    Choquet Expected Utility with Affine Capacities.Pascal Toquebeuf - 2016 - Theory and Decision 81 (2):177-187.
    This paper studies decisions under ambiguity when attention is paid to extreme outcomes. In a purely subjective framework, we propose an axiomatic characterization of affine capacities, which are Choquet capacities consisting in an affine transformation of a subjective probability. Our main axiom restricts the well-known Savage’s Sure-Thing Principle to a change in a common intermediate outcome. The representation result is then an affine combination of the expected utility of the valued act and its maximal and minimal utilities.
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  46.  73
    Rationality, Group Choice and Expected Utility.Reed Richter - 1985 - Synthese 63 (2):203 - 232.
    This paper proposes a view uniformly extending expected utility calculations to both individual and group choice contexts. Three related cases illustrate the problems inherent in applying expected utility to group choices. However, these problems do not essentially depend upon the tact that more than one agent is involved. I devise a modified strategy allowing the application of expected utility calculations to these otherwise problematic cases. One case, however, apparently leads to contradiction. But recognizing the (...)
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  47.  25
    Dynamic Consistency of Expected Utility Under Non-Classical Uncertainty.V. I. Danilov, A. Lambert-Mogiliansky & V. Vergopoulos - 2018 - Theory and Decision 84 (4):645-670.
    Quantum cognition in decision making is a recent and rapidly growing field. In this paper, we develop an expected utility theory in a context of non-classical uncertainty. We replace the classical state space with a Hilbert space which allows introducing the concept of quantum lottery. Within that framework, we formulate axioms on preferences over quantum lotteries to establish a representation theorem. We show that demanding the consistency of choice behavior conditional on new information is equivalent to the (...)
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  48.  51
    Utility Theory: Axioms Versus 'Paradoxes'.Kenneth R. MacCrimmon & Stig Larsson - 1979 - In Maurice Allais & Ole Hagen (eds.), Expected Utility Hypotheses and the Allais Paradox. D. Reidel. pp. 333--409.
  49.  25
    Expected Utility with Ambiguous Probabilities and 'Irrational' Parameters.GÜnter Franke - 1978 - Theory and Decision 9 (3):267.
  50.  35
    Maximizing Expected Utility is a Survival Criterion.Paul Snow - 1987 - Theory and Decision 22 (2):143-154.
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