Expected Utility and Cognitive Consistency

Louis Lévy-Garboua

Papiers d'Economie Mathématique et Applications from Université Panthéon-Sorbonne (Paris 1)

Abstract: One may reason before making a decision on perceiving potential objections to expected utility-preference. Cognitive consistency is attained by making full use of available information, i.e. consistent preference and reasons. I show that coincidence between the rational choice and the normative preference requires perfect consciousness, and I provide maximizing rules of decision conditional on preference which are valid with imperfect consciousness. A necessary and sufficient condition for expected utility to be descriptively valid is given. Under risk, the rational choice converges towards expected utility through unconscious learning. Many well-known paradoxes and anomalies of choice, evaluation and information are solved for well-behaved preferences.

Keywords: INFORMATION; BEHAVIOUR; RISK (search for similar items in EconPapers)
JEL-codes: D0 D8 (search for similar items in EconPapers)
Pages: 67 pages
Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Expected Utility and Cognitive Consistency (1999)
Working Paper: Expected Utility and Cognitive Consistency (1999)
Working Paper: Expected utility and cognitive consistency (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:pariem:1999.104

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