Jump to ContentJump to Main Navigation
Separability and AggregationThe Collected Works of W. M. Gorman, Volume I$
Users without a subscription are not able to see the full content.

W. M. Gorman, C. Blackorby, and A. F. Shorrocks

Print publication date: 1996

Print ISBN-13: 9780198285212

Published to Oxford Scholarship Online: November 2003

DOI: 10.1093/0198285213.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2020. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 24 November 2020

Facing an Uncertain Future

Facing an Uncertain Future

Chapter:
(p.209) 14 Facing an Uncertain Future
Source:
Separability and Aggregation
Author(s):

W. M. Gorman (Contributor Webpage)

, C. Blackorby, A. F. Shorrocks
Publisher:
Oxford University Press
DOI:10.1093/0198285213.003.0014

This paper, which was published as Technical Report No. 359 from the Institute of Mathematical Studies in the Social Sciences, Stanford University (1982), analyses uncertainty in an intertemporal context, and is designed to use to the fullest extent possible the overlapping theorem presented in ’The structure of utility functions’ (Ch. 12). At each point of time, a set of states of the world is possible, presenting the agent with a utility tree; the agent has a complete set of preferences over all possible states of the world at all periods of time; one of these states occurs, and in the next period, he or she faces some smaller portion of the tree. Assumption 2 requires the states that follow any branch of the tree to be separable from those events that can no longer happen––conditional on the actual history followed; Gorman calls this the ’very weak independence axiom’; the only other assumption used here is that the agent only examines the future closely for the next two periods, and, for the rest of the future, is content with a summary statistic. Hence Assumption 3 requires the future from t + 2 to the horizon to be separable from its complement at each t. These two assumptions are enough to generate ’Bentham and Bernoulli at a stroke’.

Keywords:   intertemporal uncertainty, overlapping theorem, preferences, separability, uncertainty, utility tree

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .