Conditioning and aggregation of preferences

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30 Scopus citations

Abstract

This paper develops a general framework for modeling choice under uncertainty that extends subjective expected utility to include nonseparabilities, state-dependence, and the effect of subjective or ill denned consequences. This is accomplished by not including consequences among the formal primitives. Instead, the effect of consequences is modeled indirectly, through conditional preferences over acts. The main results concern the aggregation of conditional utilities to form an unconditional utility, including the case of additive aggregation. Applications, obtained by further specifying the structure of acts and conditional preferences, include disappointment, regret, and the subjective value of information.

Original languageEnglish (US)
Pages (from-to)347-367
Number of pages21
JournalEconometrica
Volume65
Issue number2
DOIs
StatePublished - Mar 1997

Keywords

  • Disappointment
  • Nonadditive utility
  • Nonseparable preferences
  • Preferences for information
  • Regret
  • Utility theory

ASJC Scopus subject areas

  • Economics and Econometrics

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