Two-Stage Lotteries without the Reduction Axiom
Uzi Segal
Econometrica, 1990, vol. 58, issue 2, 349-77
Abstract:
Preference relations over two-stage lotteries are analyzed. Empirical evidence indicates that decisionmakers do not always behave in accordance with the reduction of compound lotteries axiom, but they seem to satisfy a compound independence axiom. Although the reduction and the compound independence axioms, together with continuity, imply expected utility theory, each of them by itself is compatible with all possible preference relations over simple lotteries. Using these axioms, the author analyzes three different versions of expected utility for two-stage lotteries. The author suggests several different compound dominance axioms as possible replacements of the reduction axiom, which are strictly weaker than the reduction of compound lotteries axiom. Copyright 1990 by The Econometric Society.
Date: 1990
References: Add references at CitEc
Citations: View citations in EconPapers (207)
Downloads: (external link)
http://links.jstor.org/sici?sici=0012-9682%2819900 ... O%3B2-7&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
Related works:
Working Paper: Two Stage Lotteries Without the Reduction Axiom (2000) 
Working Paper: Two-Stage Lotteries Without the Reduction Axiom (1989) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ecm:emetrp:v:58:y:1990:i:2:p:349-77
Ordering information: This journal article can be ordered from
https://www.economet ... ordering-back-issues
econometrica@econometricsociety.org
Access Statistics for this article
Econometrica is currently edited by Guido Imbens
More articles in Econometrica from Econometric Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery (contentdelivery@wiley.com).