Expected balanced uncertain utility

• 成果类型: Article
• 署名作者: Grant, Simon; Roorda, Berend; Yang, Jingni
• 署名单位: Australian National University; University of Twente; University of Sydney
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1933-6837
• DOI: 10.3982/TE5404
• 发表日期: 2025
• 关键词: subjective probabilities; ambiguity; CHOICE

摘要

We introduce and analyze expected balanced uncertain utility (EBUU) theory. A prior and a balanced outcome-set utility characterize an EBUU decision maker. Conditional on a reference or balancing value, the latter assigns a utility to each outcome-set. The decision maker associates with each act, its envelope, the minimal measurable mapping from states to outcome-sets that contains the act. She then (implicitly) ranks an act according to the balancing value at which the expected balanced utility of its associated envelope is zero. As a consequence, her risk preferences need only exhibit betweenness allowing for behavior that can accommodate Allais-type paradoxes.