When is there state independence?

Brian Hill ()

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Abstract: Whether a preference relation can be represented using state-independent utilities as opposed to state-dependent utilities may depend on which acts count as constant acts. This observation underlies an extension of Savage's expected utility theory to the state-dependent case that was proposed in this journal by Edi Karni. His result contains a condition requiring the existence of a set of acts which can play the role of constant acts and support a representation involving a state-independent utility function. This paper contains necessary and sufficient conditions on the preference relation for such a set of acts to exist. Results are obtained both for the Savage and the Anscombe and Aumann frameworks. Among the corollaries are representation theorems for state-dependent utilities. Relationships to Karni's work and extensions of the results are discussed.

Keywords: Subjective expected utility; State-dependent utility; Monotonicity axiom (search for similar items in EconPapers)
Date: 2009-05-01
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Citations: View citations in EconPapers (3)

Published in Journal of Economic Theory, 2009, Vol.144,n°3, pp.1119-1134. ⟨10.1016/j.jet.2008.11.008⟩

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Related works:
Journal Article: When is there state independence? (2009)
Working Paper: When is there state independence? (2007)
Working Paper: When is there state independence? (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00463429

DOI: 10.1016/j.jet.2008.11.008

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