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Decisions Without Ordering

  • Teddy Seidenfeld
  • M. J. Schervish
  • J. B. Kadane
Chapter
Part of the Synthese Library book series (SYLI, volume 211)

Abstract

We review the axiomatic foundations of subjective utility theory with a view toward understanding the implications of each axiom. We consider three different approaches, namely, the construction of utilities in the presence of canonical probabilities, the construction of probabilities in the presence of utilities, and the simultaneous construction of both probabilities and utilities. We focus attention on the axioms of independence and weak ordering. The independence axiom is seen to be necessary in order to prevent a form of Dutch Book in sequential problems.

Our main focus is to examine the implications of not requiring the weak order axiom. We assume that gambles are partially ordered. We consider both the construction of probabilities when utilities are given and the construction of utilities in the presence of canonical probabilities. In the first case we find that a partially ordered set of gambles leads to a set of probabilities with respect to which the expected utility of a preferred gamble is higher than that of a dispreferred gamble. We illustrate some comparisons with theories of upper and lower probabilities. In the second case, we find that a partially ordered set of gambles leads to a set of lexicographic utilities each of which ranks preferred gambles higher than dispreferred gambles.

Keywords

Partial Order Utility Theory Indifference Curve Expect Utility Theory Weak Order 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Kluwer Academic Publishers 1990

Authors and Affiliations

  • Teddy Seidenfeld
    • 1
  • M. J. Schervish
    • 2
  • J. B. Kadane
    • 2
  1. 1.Department of PhilosophyUSA
  2. 2.Department of StatisticsCarnegie Mellon UniversityPittsburghUSA

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