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2005•RePEc: Research Papers in EconomicsRequires access

Expected utility without utility

Erio Castagnoli, Marco LiCalzi

Open publisher page 26 citations

Abstract

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.

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What this paper is about

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.

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OpenAlex reports 26 citations for this work. Citation counts describe recorded attention and do not establish research quality.

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Available abstract

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.

Key concepts: Lottery, Expected utility hypothesis, Von Neumann–Morgenstern utility theorem, Interpretation (philosophy), Subjective expected utility, Mathematical economics, Utility theory, Decision theory

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