Jump to ContentJump to Main Navigation
Risk and Rationality$
Users without a subscription are not able to see the full content.

Lara Buchak

Print publication date: 2013

Print ISBN-13: 9780199672165

Published to Oxford Scholarship Online: April 2014

DOI: 10.1093/acprof:oso/9780199672165.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 27 September 2021

Representation

Representation

Chapter:
(p.82) 3Representation
Source:
Risk and Rationality
Author(s):

Lara Buchak

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780199672165.003.0004

This chapter provides a representation theorem for risk-weighted expected utility theory (proved in the Appendices). The theorem outlines a set of constraints on individuals’ preferences that are strictly weaker than the constraints of expected utility theory. It is shown that if an individual’s preferences meet these constraints, then we can represent her beliefs, her desires, and her attitude towards risk by precise numerical values. The dispute between expected utility theory and risk-weighted expected utility theory is characterized in terms of whether to accept an axiom known as Tradeoff Consistency or instead a combination of two weaker axioms: Comonotonic Tradeoff Consistency and Strong Comparative Probability. It is shown that this dispute corresponds to forbidding or allowing individuals to care about global properties of gambles.

Keywords:   representation theorem, tradeoff consistency, comonotonic tradeoff consistency, comonotonicity, strong comparative probability, risk-weighted expected utility, expected utility, risk

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 .