An expected utility theory for state-dependent preferences

Theory and Decision 81 (4):467-478 (2016)

This note is a generalization and improved interpretation of the main result of Karni and Schmeidler. A decision-maker is supposed to possess a preference relation on acts and another preference relation on state-prize lotteries, both of which are assumed to satisfy the von Neumann–Morgenstern axioms. In addition, the two preference relations restricted to a state of nature are assumed to agree. We show that these axioms are necessary and sufficient for the existence of subjective expected utility over acts with state-dependent utility functions and a subjective probability measure. This subjective probability measure is unique when conditioned on the set of states of nature in which not all the prizes are equally desirable.
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DOI 10.1007/s11238-016-9545-0
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References found in this work BETA

The Foundations of Statistics.Leonard J. Savage - 1956 - Philosophy of Science 23 (2):166-166.
Do Bets Reveal Beliefs?Jean Baccelli - 2017 - Synthese 194 (9):3393-3419.
De Finetti Was Right: Probability Does Not Exist.Robert F. Nau - 2001 - Theory and Decision 51 (2/4):89-124.

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The Problem of State-Dependent Utility: A Reappraisal.Jean Baccelli - forthcoming - British Journal for the Philosophy of Science:axz024.

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