Document Type
Discussion Paper
Publication Date
12-1-2001
CFDP Number
1342
CFDP Pages
23
Abstract
A decision maker faces a decision problem, or a game against nature. For each probability distribution over the state of the world (nature’s strategies), she has a weak order over her acts (pure strategies). We formulate conditions on these weak orders guaranteeing that they can be jointly represented by expected utility maximization with respect to an almost-unique state-dependent utility, that is, a matrix assigning real numbers to act-state pairs. As opposed to a utility function that is derived in another context, the utility matrix derived in the game will incorporate all psychological or sociological determinants of well-being that result from the very fact that the outcomes are obtained in a given game.
Recommended Citation
Gilboa, Itzhak and Schmeidler, David, "A Derivation of Expected Utility Maximization in the Context of a Game" (2001). Cowles Foundation Discussion Papers. 1604.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/1604