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Lexicographic expected utility without completeness

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  • D. Borie

    (University of Nice Sophia Antipolis, GREDEG, CNRS)

Abstract

Standard theories of expected utility require that preferences are complete, and/or Archimedean. We present in this paper a theory of decision under uncertainty for both incomplete and non-Archimedean preferences. Without continuity assumptions, incomplete preferences on a lottery space reduce to an order-extension problem. It is well known that incomplete preferences can be extended to complete preferences in the full generality, but this result does not necessarily hold for incomplete preferences which satisfy the independence axiom, since it may obviously happen that the extension does not satisfy the independence axiom. We show, for incomplete preferences on a mixture space, that an extension which satisfies the independence axiom exists. We find necessary and sufficient conditions for a preorder on a finite lottery space to be representable by a family of lexicographic von Neumann–Morgenstern Expected Utility functions.

Suggested Citation

  • D. Borie, 2016. "Lexicographic expected utility without completeness," Theory and Decision, Springer, vol. 81(2), pages 167-176, August.
    • Handle: RePEc:kap:theord:v:81:y:2016:i:2:d:10.1007_s11238-015-9523-y
    DOI: 10.1007/s11238-015-9523-y
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    References listed on IDEAS

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    Cited by:

    1. McCarthy, David & Mikkola, Kalle & Thomas, Teruji, 2020. "Utilitarianism with and without expected utility," Journal of Mathematical Economics, Elsevier, vol. 87(C), pages 77-113.
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    3. McCarthy, David & Mikkola, Kalle & Thomas, Teruji, 2017. "Representation of strongly independent preorders by vector-valued functions," MPRA Paper 80806, University Library of Munich, Germany.
    4. Petri, Henrik, 2020. "Lexicographic probabilities and robustness," Games and Economic Behavior, Elsevier, vol. 122(C), pages 426-439.
    5. McCarthy, David & Mikkola, Kalle & Thomas, Teruji, 2016. "Utilitarianism with and without expected utility," MPRA Paper 72578, University Library of Munich, Germany.
    6. Russell, Jeffrey Sanford, 2020. "Non-Archimedean preferences over countable lotteries," Journal of Mathematical Economics, Elsevier, vol. 88(C), pages 180-186.
    7. David McCarthy & Kalle Mikkola & Teruji Thomas, 2019. "Aggregation for potentially infinite populations without continuity or completeness," Papers 1911.00872, arXiv.org.

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