Decomposable choice under uncertainty (Q1581187)

In the expected utility theory under objective risk decomposability of decisions is implied by the independence axiom which is similar to the sure-thing principle in Savage theory of subjective utility under uncertainty. However, the independence axiom has been widely criticised from theoretical as well as from empirical points of view. In the present paper the weaker form of the axiom is proposed and discussed which is however sufficient for the decomposability. It is shown that weak decomposability is almost equivalent to the dynamic programming solvability property by Gul-Lantto. It is similar to the betweeness discussed by Chew-Dekel in case the probabilistic sophistication is assumed. In the case without probabilistic sophistication weak decomposability still ensures implicit additive representation of preferences.