Subjective Expected Utility Theory with "Small Worlds"
Publikation: Working paper › Forskning
Dokumenter
- DP 09-26
Forlagets udgivne version, 482 KB, PDF-dokument
We model the notion of a "small world" as a context dependent state space embedded into the "grand world". For each situation the decision maker creates a "small world" reflecting the events perceived to be relevant for the act under consideration. The "grand world" is represented by an event space which is a more general construction than a state space. We retain preference axioms similar in spirit to the Savage axioms and obtain, without abandoning linearity of expectations, a subjective expected utility theory which allows for an intuitive distinction between risk and uncertainty. We also obtain separation of subjective probability and utility as in the state space models.
Originalsprog | Engelsk |
---|---|
Udgiver | Department of Economics, University of Copenhagen |
Antal sider | 22 |
Status | Udgivet - 2009 |
Bibliografisk note
JEL classification: D8, G12
- Det Samfundsvidenskabelige Fakultet
Forskningsområder
Antal downloads er baseret på statistik fra Google Scholar og www.ku.dk
Ingen data tilgængelig
ID: 16276798