Expected utility: weak and strong
Expected utility: weak and strong
In this paper we show that, given a monotone preference order that satisfies weak independence, the expected utility model (as a weak or strong representation) can be directly obtained from intuitive conditions. In particular, a weak expected utility representation can be constructed by using substitutability, while the stronger counterpart can be derived by using solvability. We provide simple examples which demonstrate that our characterization of the expected utility preferences is tight. Unlike many other expected utility characterizations, our proofs are constructive making them especially useful when testing the model.
Expected utility, Monotonicity, Independence, Substitutability, Solvability, Continuity
Ozbek, Kemal
e7edfcf5-cb17-4e64-bfa4-30fb527d2e46
Ozbek, Kemal
e7edfcf5-cb17-4e64-bfa4-30fb527d2e46
Ozbek, Kemal
(2024)
Expected utility: weak and strong.
Communications in Optimization Theory.
(In Press)
Abstract
In this paper we show that, given a monotone preference order that satisfies weak independence, the expected utility model (as a weak or strong representation) can be directly obtained from intuitive conditions. In particular, a weak expected utility representation can be constructed by using substitutability, while the stronger counterpart can be derived by using solvability. We provide simple examples which demonstrate that our characterization of the expected utility preferences is tight. Unlike many other expected utility characterizations, our proofs are constructive making them especially useful when testing the model.
Text
EUWS_may21
- Accepted Manuscript
More information
Accepted/In Press date: 21 May 2024
Keywords:
Expected utility, Monotonicity, Independence, Substitutability, Solvability, Continuity
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Local EPrints ID: 490842
URI: http://eprints.soton.ac.uk/id/eprint/490842
PURE UUID: 5f750c18-2a51-4ad9-9387-f5167ca7cea8
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Date deposited: 06 Jun 2024 17:18
Last modified: 07 Jun 2024 01:58
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