Theory and Decision

, Volume 41, Issue 3, pp 281–301

Expected utility without utility

Authors

  • E. Castagnoli
    • Istituto di Metodi Quantitativi Università ‘L. Bocconi’
  • M. Li Calzi
    • Dipartimento di Matematica ApplicataUniversità di Venezia
Article

DOI: 10.1007/BF00136129

Cite this article as:
Castagnoli, E. & Calzi, M.L. Theor Decis (1996) 41: 281. doi:10.1007/BF00136129

Abstract

This paper advances an interpretation of Von Neumann-Morgenstern's expected utility model for preferences over lotteries which does not require the notion of a cardinal utility over prizes and can be phrased entirely in the language of probability. According to it, the expected utility of a lottery can be read as the probability that this lottery outperforms another given independent lottery. The implications of this interpretation for some topics and models in decision theory are considered.

Key words

Expected utilitycardinal utilitybenchmarkrisk attitudestochastic dominance

Copyright information

© Kluwer Academic Publishers 1996