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When is there state independence?

Abstract : It has been noticed that whether a preference relation can be represented by state-independent utilities as opposed to state-dependent utilities may depend on which acts count as constant acts [Schervish et al., 1990]. Indeed, this remark underlies an extension of Savage's expected utility theory to the state-dependent case that was proposed by Edi Karni [Karni, 1993]. This paper contains a characterisation of the preference relations that permit a choice of acts which can play the role of constant acts, and relative to which there is a representation involving a state-independent utility function. This result applies both in the Savage and in the Anscombe & Aumann frameworks. It has as an immediate corollary an extension of Karni's representation theorem. Finally, it is of methodological interest, insofar that it harnesses techniques from mathematical logic to prove a theorem of interest to decision theorists and economists.
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https://hal-hec.archives-ouvertes.fr/hal-00582662
Contributor : Antoine Haldemann <>
Submitted on : Sunday, April 3, 2011 - 3:35:43 PM
Last modification on : Saturday, December 29, 2018 - 12:34:05 PM

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  • HAL Id : hal-00582662, version 1

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Brian Hill. When is there state independence?. 2007. ⟨hal-00582662⟩

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