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Independent postulates for subjective expected utility

Author

Listed:
  • Mikko Harju

    (Aalto University School of Science)

  • Juuso Liesiö

    (Aalto University School of Business)

  • Kai Virtanen

    (Aalto University School of Science
    National Defence University)

Abstract

Although the subjective expected utility (SEU) theory is more than 60 years old, it was recently discovered by Hartmann (Econometrica 88(1):203–205, 2020, https://doi.org/10.3982/ECTA17428 ) that one of the original seven postulates is redundant, i.e., it is implied by the other six postulates. In this brief communication, we show that this redundant axiom is the only one that is implied by the other axioms, thereby establishing that the remaining six postulates form an independent axiomatic system. This result further streamlines the preference assumptions underlying the SEU theory.

Suggested Citation

  • Mikko Harju & Juuso Liesiö & Kai Virtanen, 2024. "Independent postulates for subjective expected utility," Theory and Decision, Springer, vol. 96(4), pages 597-606, June.
    • Handle: RePEc:kap:theord:v:96:y:2024:i:4:d:10.1007_s11238-023-09959-3
    DOI: 10.1007/s11238-023-09959-3
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    References listed on IDEAS

    as
    1. Lorenz Hartmann, 2020. "Savage's P3 Is Redundant," Econometrica, Econometric Society, vol. 88(1), pages 203-205, January.
    2. Harju, Mikko & Liesiö, Juuso & Virtanen, Kai, 2019. "Spatial multi-attribute decision analysis: Axiomatic foundations and incomplete preference information," European Journal of Operational Research, Elsevier, vol. 275(1), pages 167-181.
    3. Peter Wakker, 1993. "Savage's Axioms Usually Imply Violation of Strict Stochastic Dominance," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(2), pages 487-493.
    4. Abdellaoui, Mohammed & Wakker, Peter P., 2020. "Savage for dummies and experts," Journal of Economic Theory, Elsevier, vol. 186(C).
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