Decisions under imperfect knowledge: The certainty equivalence theory as an alternative to the Von Neumann-Morgenstern theory of uncertainty [Book Review]

Erkenntnis 20 (3):295 - 328 (1983)
This paper offers a modified version of the certainty equivalence (CE) theory of utility for uncertain prospects and a new set of axioms as its basis. It shows that the CE and the von Neumann-Morgenstern (NM) approaches to uncertainty are opposite in spirit: The CE approach represents a flight from the world of uncertainty to the rules of certainty while the NM approach represents a flight from the world of certainty to one of uncertainty. The two approaches differ even in their treatment of compound prospects and their actuarially identical simple counterparts.
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DOI 10.1007/BF00166391
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The Foundations of Statistics.Leonard J. Savage - 1954 - Wiley Publications in Statistics.
Risk, Uncertainty and Profit.Frank Knight - 1921 - University of Chicago Press.
Decision, Order and Time in Human Affairs.C. Blake & G. L. S. Shackle - 1962 - Philosophical Quarterly 12 (48):266.

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