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Axiomatization of weighted (separable) utility

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  • Blavatskyy, Pavlo

Abstract

Nontrivial decision problems typically involve a trade-off among multiple attributes of choice options. One simple way of resolving such trade-offs is to aggregate multiple attributes into one real-valued index, known as weighted or separable utility. Applications of weighted utility can be found in choice under risk (expected utility) and uncertainty (subjective expected utility), intertemporal choice (discounted utility) and welfare economics (utilitarian social welfare function). This paper presents an alternative behavioral characterization (preference axiomatization) of weighted utility. It is shown that necessary and sufficient conditions for weighted utility are completeness, continuity, bi-separable transitivity (and transitivity if none of the attributes is null, or inessential).

Suggested Citation

  • Blavatskyy, Pavlo, 2014. "Axiomatization of weighted (separable) utility," Journal of Mathematical Economics, Elsevier, vol. 54(C), pages 138-142.
    • Handle: RePEc:eee:mateco:v:54:y:2014:i:c:p:138-142
    DOI: 10.1016/j.jmateco.2013.12.009
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    References listed on IDEAS

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    1. Pavlo Blavatskyy, 2013. "A Simple Behavioral Characterization of Subjective Expected Utility," Operations Research, INFORMS, vol. 61(4), pages 932-940, August.
    2. Blavatskyy, Pavlo R., 2012. "The Troika paradox," Economics Letters, Elsevier, vol. 115(2), pages 236-239.
    3. Veronika Köbberling & Peter P. Wakker, 2003. "Preference Foundations for Nonexpected Utility: A Generalized and Simplified Technique," Mathematics of Operations Research, INFORMS, vol. 28(3), pages 395-423, August.
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