Utility in Case-Based Decision Theory

Itzhak Gilboa (1) , David Schmeidler (1, 2) , Peter P. Wakker (3)

1 TAU - Tel Aviv University
2 OSU - Ohio State University [Columbus]
3 UvA - University of Amsterdam [Amsterdam]

This paper provides two axiomatic derivations of a case-baseddecision rule. Each axiomatization shows that, if preference orders over available acts in various contexts satisfy certain consistency requirements, then these orders can be numerically represented by maximization of a similarity-weighted utility function. In each axiomatization, both the similarity function and the utility function are simultaneously derived from preferences, and the axiomatic derivation also suggests a way to elicit these theoretical concepts from in-principle observable preferences. The two axiomatizations differ in the type of decisions that they assume as data.

Keywords: decision under uncertainty; case-based decision theory

Domains: Economy and decision science

Itzhak Gilboa, David Schmeidler, Peter P. Wakker. Utility in Case-Based Decision Theory. Journal of Economic Theory, 2002, vol. 105, issue 2, pp. 483-502. ⟨10.1006/jeth.2001.2858⟩. ⟨hal-00752278⟩