An argument for the principle of maximizing expected utility
2008 (English)In: Theoria, ISSN 0040-5825, E-ISSN 1755-2567, Vol. 38, no 2, 112-128 p.Article in journal (Refereed) Published
The main result of this paper is a formal argument for the principle of maximizing expected utility that does not rely on the law of large numbers. Unlike the well-known arguments by Savage and von Neumann & Morgenstern, this argument does not presuppose the sure-thing principle or the independence axiom. The principal idea is to use the concept of transformative decision rules for decomposing the principle of maximizing expected utility into a sequence of normatively reasonable subrules. It is shown that this procedure provides a resolution of Allais's paradox that cannot be obtained by Savage-style or von Neumann & Morgenstern-style arguments.
Place, publisher, year, edition, pages
2008. Vol. 38, no 2, 112-128 p.
IdentifiersURN: urn:nbn:se:kth:diva-13458DOI: 10.1111/j.1755-2567.2002.tb00124.xOAI: oai:DiVA.org:kth-13458DiVA: diva2:325403
QC 201006182010-06-182010-06-182010-09-10Bibliographically approved