Abstract
Introspection about certain hypothetical decision situations suggests that the sure-thing principle and, with it, the theory of utility are normatively unsatisfactory. Consider an example based on two decision situations each involving two gambles.
Leonard Savage was deceased at the time of publication.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsNotes
- 1.
- 2.
Allais has announced (but not yet published) an empirical investigation of the responses of prudent, educated people to such examples (Allais 1953).
- 3.
References
Allais, M. (1953). Le comportement de l’homme rationnel devant le risque: Critique des postulats et axioms de l’école Americaine. Econometrica, 21, 503–546.
Archibald, G. C. (1959). Utility, risk, and linearity. Journal of Political Economy, 67, 437–450.
Bernoulli, D. (1738). Specimen theoriae novae de mensura sortis. Commentarii academiae scientiarum imperialis Petropolitanae (for 1730 and 1731), 5, 175–192.
Centre National de Recherche Scientifique Fondements et applications de la théorie du risque en économetrie, Paris, Centre National de la Recherche Scientifique. (1954) Report of an international econometric colloquium on risk, in which there was much discussion of utility, held in Paris, May 12–17, 1952.
Friedman, M. (1953). Choice, chance, and personal distribution of income. Journal of Political Economy, 61, 277–290.
Friedman, M., & Savage, L. J. (1948). The utility analysis of choices involving risk. Journal of Political Economy, 56, 279–304, Reprinted, with a correction, in Stigler and Boulding (1952).
Hakansson, N. H. (1970). Friedman-Savage utility functions consistent with risk aversion. Quarterly Journal of Economics, 84, 472–487.
Markowitz, H. (1952). The utility of wealth. Journal of Political Economy, 60, 151–158, Marshall, Alfred.
Stigler, G. J., & Boulding, K. E. (Eds.). (1952). Readings in price theory. Chicago: Richard D. Irwin.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2016 Springer International Publishing Switzerland
About this chapter
Cite this chapter
Savage, L. (2016). Allais’s Paradox. In: Arló-Costa, H., Hendricks, V., van Benthem, J. (eds) Readings in Formal Epistemology. Springer Graduate Texts in Philosophy, vol 1. Springer, Cham. https://doi.org/10.1007/978-3-319-20451-2_19
Download citation
DOI: https://doi.org/10.1007/978-3-319-20451-2_19
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-20450-5
Online ISBN: 978-3-319-20451-2
eBook Packages: Religion and PhilosophyPhilosophy and Religion (R0)