Subjective Expected Utility with State-Dependent but Action/Observation-Independent Preferences
Under state-dependent preferences, probabilities and units of scale of state-dependent utilities are not separately identified. In standard models, only their products matter to decisions. Separate identification has been studied under implicit actions by Drèze or under explicit actions and observat...
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2018-03-01
|
| Series: | Risks |
| Subjects: | |
| Online Access: | http://www.mdpi.com/2227-9091/6/2/30 |
| _version_ | 1811245566867275776 |
|---|---|
| author | Jacques H. Drèze |
| author_facet | Jacques H. Drèze |
| author_sort | Jacques H. Drèze |
| collection | DOAJ |
| description | Under state-dependent preferences, probabilities and units of scale of state-dependent utilities are not separately identified. In standard models, only their products matter to decisions. Separate identification has been studied under implicit actions by Drèze or under explicit actions and observations by Karni. This paper complements both approaches and relates them when conditional preferences for final outcomes are independent of actions and observations. That special case permits drastic technical simplification while remaining open to some natural extensions. |
| first_indexed | 2024-04-12T14:41:43Z |
| format | Article |
| id | doaj.art-9e0a89be560a4ff7bc2bbf704a6abdb4 |
| institution | Directory Open Access Journal |
| issn | 2227-9091 |
| language | English |
| last_indexed | 2024-04-12T14:41:43Z |
| publishDate | 2018-03-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Risks |
| spelling | doaj.art-9e0a89be560a4ff7bc2bbf704a6abdb42022-12-22T03:28:49ZengMDPI AGRisks2227-90912018-03-01623010.3390/risks6020030risks6020030Subjective Expected Utility with State-Dependent but Action/Observation-Independent PreferencesJacques H. Drèze0Center for Operations Research and Econometrics (CORE), Université catholique de Louvain, B-1348 Louvain La Neuve, BelgiumUnder state-dependent preferences, probabilities and units of scale of state-dependent utilities are not separately identified. In standard models, only their products matter to decisions. Separate identification has been studied under implicit actions by Drèze or under explicit actions and observations by Karni. This paper complements both approaches and relates them when conditional preferences for final outcomes are independent of actions and observations. That special case permits drastic technical simplification while remaining open to some natural extensions.http://www.mdpi.com/2227-9091/6/2/30expected utilitystate-dependent preferencessubjective probability |
| spellingShingle | Jacques H. Drèze Subjective Expected Utility with State-Dependent but Action/Observation-Independent Preferences Risks expected utility state-dependent preferences subjective probability |
| title | Subjective Expected Utility with State-Dependent but Action/Observation-Independent Preferences |
| title_full | Subjective Expected Utility with State-Dependent but Action/Observation-Independent Preferences |
| title_fullStr | Subjective Expected Utility with State-Dependent but Action/Observation-Independent Preferences |
| title_full_unstemmed | Subjective Expected Utility with State-Dependent but Action/Observation-Independent Preferences |
| title_short | Subjective Expected Utility with State-Dependent but Action/Observation-Independent Preferences |
| title_sort | subjective expected utility with state dependent but action observation independent preferences |
| topic | expected utility state-dependent preferences subjective probability |
| url | http://www.mdpi.com/2227-9091/6/2/30 |
| work_keys_str_mv | AT jacqueshdreze subjectiveexpectedutilitywithstatedependentbutactionobservationindependentpreferences |