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Expected utility in Savage’s framework without the completeness axiom

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  • Dino Borie

    (CY Cergy Paris Université)

Abstract

This paper extends the subjective expected utility model of decision making under uncertainty to include incomplete beliefs and tastes in Savage’s framework. The main result is an axiomatization of the subjective multi-prior expected multi-utility representations of preference relations under uncertainty. In contrast with the existing works, the setup allows for flexibility regarding the outcome space. The approach of this paper also provides theoretical foundations for subjective Knightian uncertainty and the expected multi-utility model with complete beliefs.

Suggested Citation

  • Dino Borie, 2023. "Expected utility in Savage’s framework without the completeness axiom," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(2), pages 525-550, August.
    • Handle: RePEc:spr:joecth:v:76:y:2023:i:2:d:10.1007_s00199-022-01464-y
    DOI: 10.1007/s00199-022-01464-y
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    References listed on IDEAS

    as
    1. Schmeidler, David, 1989. "Subjective Probability and Expected Utility without Additivity," Econometrica, Econometric Society, vol. 57(3), pages 571-587, May.
    2. Faro, José Heleno, 2015. "Variational Bewley preferences," Journal of Economic Theory, Elsevier, vol. 157(C), pages 699-729.
    3. Gil Riella, 2015. "On the representation of incomplete preferences under uncertainty with indecisiveness in tastes and beliefs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 58(3), pages 571-600, April.
    4. Nehring, Klaus, 2009. "Imprecise probabilistic beliefs as a context for decision-making under ambiguity," Journal of Economic Theory, Elsevier, vol. 144(3), pages 1054-1091, May.
    5. Efe A. Ok & Pietro Ortoleva & Gil Riella, 2012. "Incomplete Preferences Under Uncertainty: Indecisiveness in Beliefs versus Tastes," Econometrica, Econometric Society, vol. 80(4), pages 1791-1808, July.
    6. Robert G. Chambers & Tigran Melkonyan & John Quiggin, 2022. "Incomplete preferences, willingness to pay, and willingness to accept," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 74(3), pages 727-761, October.
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    More about this item

    Keywords

    Subjective expected utility; Incomplete preferences; Multiple beliefs; Multiple tastes;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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