TY - JOUR

T1 - Subjective Probability under Additive Aggregation of Conditional Preferences

AU - Skiadas, Costis

PY - 1997/10

Y1 - 1997/10

N2 - This paper provides an axiomatic basis for a representation of personal preferences in which the utility of an act can be expressed as an expected value of conditional utilities of the act given any set of mutually exclusive and exhaustive scenarios, under a unique subjective probability. The representation is general enough to incorporate state-dependent utilities and/or utilities with dependencies across states, as, for example, in the case of disappointment aversion. More generally, this is a model incorporating subjective probability and subjective consequences, since neither probabilities nor consequences are included among its primitives. The model reduces to subjective expected utility under the additional assumptions of separability and state-independence with respect to an objective state-contingent structure of acts.Journal of Economic LiteratureClassification Numbers: D81, D84.

AB - This paper provides an axiomatic basis for a representation of personal preferences in which the utility of an act can be expressed as an expected value of conditional utilities of the act given any set of mutually exclusive and exhaustive scenarios, under a unique subjective probability. The representation is general enough to incorporate state-dependent utilities and/or utilities with dependencies across states, as, for example, in the case of disappointment aversion. More generally, this is a model incorporating subjective probability and subjective consequences, since neither probabilities nor consequences are included among its primitives. The model reduces to subjective expected utility under the additional assumptions of separability and state-independence with respect to an objective state-contingent structure of acts.Journal of Economic LiteratureClassification Numbers: D81, D84.

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U2 - 10.1006/jeth.1997.2303

DO - 10.1006/jeth.1997.2303

M3 - Article

AN - SCOPUS:0000696769

SN - 0022-0531

VL - 76

SP - 242

EP - 271

JO - Journal of Economic Theory

JF - Journal of Economic Theory

IS - 2

ER -