Expected utility without utility
Erio Castagnoli and
Marco LiCalzi ()
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Erio Castagnoli: Bocconi University, Italy
Game Theory and Information from University Library of Munich, Germany
This paper advances an interpretation of Von Neumann–Morgenstern’s expected utility model for preferences over lotteries which does not require the notion of a cardinal utility over prizes and can be phrased entirely in the language of probability. According to it, the expected utility of a lottery can be read as the probability that this lottery outperforms another given independent lottery. The implications of this interpretation for some topics and models in decision theory are considered.
Keywords: expected utility; cardinal utility; benchmark; risk attitude; stochastic dominance (search for similar items in EconPapers)
JEL-codes: C7 D8 (search for similar items in EconPapers)
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Note: Type of Document - pdf; pages: 16
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpga:0508004
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