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Procedural Mixture Spaces

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  • Rommeswinkel, Hendrik

Abstract

This paper provides a representation theorem for procedural mixture spaces. Procedural mixture spaces are mixture spaces in which it is not necessarily true that a mixture of two identical elements yields the same element. Under the remaining standard assumptions of mixture spaces, the following representation theorem is proven; a rational, independent, and continuous preference relation over mixture spaces can be represented either by expected utility plus the Shannon entropy or by expected utility under probability distortions plus the Renyi entropy. The entropy components can be interpreted as the utility or disutility from resolving the mixture and therefore as a procedural as opposed to consequentialist value.

Suggested Citation

  • Rommeswinkel, Hendrik, 2019. "Procedural Mixture Spaces," MPRA Paper 92535, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:92535
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Risk; decision theory; procedural value; lotteries; mixture spaces;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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