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Stochastic models for risky choices: A comparison of different axiomatizations

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  • Dagsvik, John K.

Abstract

For a long time researchers have recognized the need for applying stochastic models for analyzing data generated from agents’ choice under risk. This paper compares and discusses recent axiomatizations of stochastic models for risky choice given by Blavatskyy (2008) and Dagsvik (2008). We show that some of Blavatskyy’s axioms are equivalent to some of Dagsvik’s axioms. We also propose new axioms and derive their implications. Specifically, we show that some of the results of Dagsvik (2008) can be derived under weaker axioms than those he proposed originally.

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  • Dagsvik, John K., 2015. "Stochastic models for risky choices: A comparison of different axiomatizations," Journal of Mathematical Economics, Elsevier, vol. 60(C), pages 81-88.
    • Handle: RePEc:eee:mateco:v:60:y:2015:i:c:p:81-88
    DOI: 10.1016/j.jmateco.2015.06.013
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    References listed on IDEAS

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    1. Fishburn, Peter C, 1978. "A Probabilistic Expected Utility Theory of Risky Binary Choices," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(3), pages 633-646, October.
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    Cited by:

    1. Blavatskyy, Pavlo, 2018. "Fechner’s strong utility model for choice among n>2 alternatives: Risky lotteries, Savage acts, and intertemporal payoffs," Journal of Mathematical Economics, Elsevier, vol. 79(C), pages 75-82.
    2. Matthew Ryan, 2018. "Uncertainty and binary stochastic choice," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(3), pages 629-662, May.
    3. Matthew Ryan, 2021. "Stochastic expected utility for binary choice: a ‘modular’ axiomatic foundation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(2), pages 641-669, September.
    4. Dagsvik, John K., 2018. "Invariance axioms and functional form restrictions in structural models," Mathematical Social Sciences, Elsevier, vol. 91(C), pages 85-95.
    5. Blavatskyy, Pavlo, 2019. "Future plans and errors," Mathematical Social Sciences, Elsevier, vol. 102(C), pages 85-92.
    6. Ge, Ge & Godager, Geir, 2021. "Predicting strategic medical choices: An application of a quantal response equilibrium choice model," Journal of choice modelling, Elsevier, vol. 39(C).
    7. Dagsvik, John K, 2017. "Invariance Axioms and Functional Form Restrictions in Structural Models," Memorandum 08/2017, Oslo University, Department of Economics.

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