Action-Independent Subjective Expected Utility without States of the World


This paper develops an axiomatic theory of decision-making under uncertainty that has no state-space. The choice setting follows Karni [1,2]: a set of effects (outcomes), a set of actions which induce these effects, and a set of real-valued bets over effects. In Karni’s representation, a preference over action/bet pairs yields utility, which is action-dependent. In our representation, utility is action-independent. This is achieved by augmenting Karni’s choice set with lotteries over actions. Identification is achieved similarly to Anscombe-Aumann [3], in which there are objective “roulette” lotteries over subjective “horse race” lotteries.

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A. Pape, "Action-Independent Subjective Expected Utility without States of the World," Theoretical Economics Letters, Vol. 3 No. 5B, 2013, pp. 17-21. doi: 10.4236/tel.2013.35A2004.

Conflicts of Interest

The authors declare no conflicts of interest.


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[8] D. M. Kreps, “Notes on the Theory of Choice. Underground Classics in Economics,” Westview Press, Inc., Fredrick A. Praeger, 1988.

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