An argument for the principle of maximizing expected utility
Bibliographic Data
| ID | 20142373 |
|---|---|
| Authors | Martin Peterson (0000-0003-0014-9684, KTH Royal Institute of Technology, corresponding author) |
| Year | 2002 |
| Volume | 68 |
| Issue | 2 |
| Pages | 112-128 |
| Publication date | 2002-08-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Theoria (JOURNAL) |
| Journal identifiers | ISSN: 0040-5825 • E-ISSN: 1755-2567 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/j.1755-2567.2002.tb00124.x |
| OpenAlex | W2151108206 |
| Language | EN |
| References cited | 5 |
The main result of this paper is a formal argument for the principle of maximizing expected utility that does not rely on the law of large numbers. Unlike the well‐known arguments by Savage and von Neumann & Morgenstern, this argument does not presuppose the sure‐thing principle or the independence axiom. The principal idea is to use the concept of transformative decision rules for decomposing the principle of maximizing expected utility into a sequence of normatively reasonable subrules. It is shown that this procedure provides a resolution of Allais's paradox that cannot be obtained by Savage‐style or von Neumann & Morgenstern‐style arguments
Argument (complex analysis) · Axiom · Axiom independence · Expected utility hypothesis · Mathematical economics · Principal (computer security) · Pure mathematics · Von Neumann architecture · Von Neumann–Morgenstern utility theorem · Computer Science · Decision-Making and Behavioral Economics · Mathematics · Philosophy and History of Science
| Citation velocity | historical |
|---|---|
| Highly cited | No |