Subjective expected utility theory with state-dependent preferences

DOI10.1006/JETH.1993.1051MaRDI QIDQ1308817zbMATH OpenOpenAlexFDO

Authors Edi Karni

Publication date 14 June 1994

Published in Journal of Economic Theory (Search for Journal in Brave)

Copyright license Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International

Full work available at URL https://doi.org/10.1006/jeth.1993.1051

zbMATH Keywords

Savage'e subjective expected utility theorystate-dependent preferences

Mathematics Subject Classification ID

Utility theory (91B16)

Review text

This paper extends Savage's subjective expected utility theory to include state-dependent preferences. The dependence of the decision maker's preferences over consequences on the states of nature is represented by state-specific mappings of the set of consequences onto itself. Within this framework Savage's postulates are reformulated and it is shown that there exists subjective expected utility representations of the preference relation over acts with a unique, nonatomic, probability measure on the algebra of all events, and a state-dependent utility function over the set of consequences.

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Cited in

(39)

• When is there state independence?
• The ignorant observer
• Living without state-independence of utilities
• Subjective probabilities for state dependent continuous utility
• Subjective probabilities and utility with event-dependent preferences
• Subjective probability under additive aggregation of conditional preferences
• Reference-dependent subjective expected utility.
• On the rejectability of the subjective expected utility theory
• Do bets reveal beliefs? A unified perspective on state-dependent utility issues
• A theory of quantifiable beliefs
• Subjective expected utility theory with costly actions
• On the representation of beliefs by probabilities
• Utility theory with probability dependent outcome valuation: Extensions and applications
• A simplified approach to subjective expected utility
• Fully Bayesian aggregation
• Subjective expected utility with non-additive probabilities on finite state spaces
• Savage for dummies and experts
• Bayesian decision theory with action-dependent probabilities and risk attitudes
• An expected utility theory for state-dependent preferences
• Familiarity breeds completeness
• Subjective expected utility theory without states of the world
• Conditional preference orders and their numerical representations
• Subjectively expected state-independent utility on state-dependent consequence domains
• State dependent expected utility for Savage's state space
• State-dependent utilities
• State-Dependent Utilities
• EXPLICIT SOLUTIONS OF CONSUMPTION-INVESTMENT PROBLEMS IN FINANCIAL MARKETS WITH REGIME SWITCHING
• State-Dependent Utility
• Shared Preferences and State-Dependent Utilities
• A non-Bayesian theory of state-dependent utility
• A Definition of Subjective Probabilities with State-Dependent Preferences
• Independent postulates for subjective expected utility
• Expected utility in 3D
• Moral hazard, the Savage framework, and state-dependent utility
• Reference-dependent expected utility with incomplete preferences
• Balancing acts
• The likelihood method for decision under uncertainty
• Foundations of Bayesian theory
• State-dependent strength-of-preference

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