Remarks to Professor Allais’ Contributions to the Theory of Expected Utility and Related Subjects

Abstract

Professor Allais’ very interesting and important contributions to economics in general and especially to the theory of expected utility and to decision theory extend into many directions and refer to different branches of science. They may be found in his article “The Foundations of a Positive Theory of Choice Involving Risk and a Critisism of the Postulates and Axioms of the American School” in the book: Allais and Hagen (eds.) “Expected Utility Hypotheses and the Allais Paradox”, Reidel Publishing Corp., as well as in the manuscripts “Fréquence, probabilité et hazard”, Février 1982, and “Les fondations de la théorie de l’utilité et du risqué” 29 aoŭt 1983. My remarks are based on these three publications and refer to the following points:

• 1. The concept of probability

• 2. Descriptive vs. prescriptive theories

• 3. Axioms of optimal behavior under uncertainty.