Expected utility, independence, and continuity

Kemal Ozbek ()
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Kemal Ozbek: University of Southampton

Theory and Decision, 2024, vol. 97, issue 1, No 1, 22 pages

Abstract: Abstract In this paper, we provide two novel expected utility theorems by suitably adjusting the independence and continuity axioms. Our first theorem characterizes expected utility preferences using weak versions of the independence axiom (with varying mixture weights) and a new weak continuity axiom. Our second theorem characterizes these preferences using weaker versions of the independence axiom (with mixture weights fixed at 1/2) and a strong topological continuity axiom. We provide useful examples to illustrate the tightness of these characterizations.

Keywords: Expected utility; Independence; Continuity; Even-chance mixtures (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11238-023-09964-6

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