A Combination of Expected Utility and Maxmin Decision Criteria

Itzhak Gilboa (1)

1 Northwestern University [Evanston]

A new explanation of the Allais paradox is suggested. A decision rule representable by an increasing function of the expected utility and the minimum utility is axiomatized. The lexicographic separability of this function is also discussed and axiomatized.

Keywords: Expected Utility; Maxmin Decision Criteria

Domains: Humanities and Social Sciences; Economics and Finance; Economy and decision science

Itzhak Gilboa. A Combination of Expected Utility and Maxmin Decision Criteria. Journal of Mathematical Psychology, 1988, vol. 32, issue 4, pp. 405-420. ⟨10.1016/0022-2496(88)90020-X⟩. ⟨hal-00753244⟩