Subjective Probability under Additive Aggregation of Conditional Preferences

Costis Skiadas*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

30 Scopus citations

Abstract

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.

Original languageEnglish (US)
Pages (from-to)242-271
Number of pages30
JournalJournal of Economic Theory
Volume76
Issue number2
DOIs
StatePublished - Oct 1997

ASJC Scopus subject areas

  • Economics and Econometrics

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