TY - JOUR
T1 - A derivation of expected utility maximization in the context of a game
AU - Gilboa, Itzhak
AU - Schmeidler, David
N1 - Funding Information:
We thank an associate editor and two anonymous referees for comments and references. This work was partially supported by ISF Grant No. 790/00.
PY - 2003/7
Y1 - 2003/7
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=30244470752&partnerID=8YFLogxK
U2 - 10.1016/s0899-8256(03)00015-0
DO - 10.1016/s0899-8256(03)00015-0
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AN - SCOPUS:30244470752
SN - 0899-8256
VL - 44
SP - 172
EP - 182
JO - Games and Economic Behavior
JF - Games and Economic Behavior
IS - 1
ER -