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State Dependent Utility

Aldo Rustichini and Jacques Dreze

No 1994043, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: The Theory of State Dependent Utility studies the behavior under certainty of a decision-maker whose utility over consequences may depend on the state in which they occur. There is by now a vast literature on the topic, that this paper reviews, trying at the same time to provide an unifying point of view, which will be further developed by the authors in a paper to follow. The present paper is organised in two main sections. In the first we examine the main theoretical contributions to the field, while in the second we present and discuss some of the applications and of the empirical work related to the Theory of State Dependent Utilities.

Date: 1994-10-01
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