Derivation of a cardinal utility through a weak trade-off consistency requirement

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Abstract

An axiomatic model is presented in which a utility function over consequences, unique up to location and unit, is derived. The assumptions apply to a binary relation over purely subjective acts, namely, no exogenous probabilities are assumed. The main assumption used is a weak trade-off consistency condition. The model generalizes the biseparable model of Ghirardato and Marinacci [Ghirardato P, Marinacci M (2001) Risk, ambiguity, and the separation of utility and beliefs.

Original languageEnglish
Pages (from-to)290-300
Number of pages11
JournalMathematics of Operations Research
Volume39
Issue number2
Early online date6 Sep 2013
DOIs
StatePublished - May 2014

Keywords

  • Cardinal utility
  • Choice under uncertainty
  • Decision theory
  • Trade-off consistency

All Science Journal Classification (ASJC) codes

  • Computer Science Applications
  • General Mathematics
  • Management Science and Operations Research

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