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Transforming Probabilities without Violating Stochastic Dominance

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Mathematical Psychology in Progress

Part of the book series: Recent Research in Psychology ((PSYCHOLOGY))

Abstract

The idea of expected utility, to transform payments into their utilities before calculating expectation, traces back at least to Bernoulli (1738). It is a very natural idea to transform, analogously, probabilities. This paper gives heuristic visual arguments to show that the, at first sight, natural way to do this, at second thought seems questionable. At second thought a sound and natural way is the way of anticipated utility, as indicated by Quiggin (1982).

The research has been made possible by a fellowship of the Royal Netherlands Academy of Arts and Sciences.

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Author information

Authors and Affiliations

  1. Nijmegen Institute for Cognition research and Information technology (NICI), University of Nijmegen, The Netherlands

    Peter Wakker

  2. Department of Mathematical Psychology, University of Nijmegen (NICI), P.O. Box 9104, 6500 HE, Nijmegen, The Netherlands

    Peter Wakker

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  1. Peter Wakker
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Editors and Affiliations

  1. Department of Psychology, University of Nijmegen, P.O. Box 9104, 6500 HE, Nijmegen, The Netherlands

    Edward E. Roskam

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© 1989 Springer-Verlag Berlin Heidelberg

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Wakker, P. (1989). Transforming Probabilities without Violating Stochastic Dominance. In: Roskam, E.E. (eds) Mathematical Psychology in Progress. Recent Research in Psychology. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-83943-6_2

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  • DOI: https://doi.org/10.1007/978-3-642-83943-6_2

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-540-51686-6

  • Online ISBN: 978-3-642-83943-6

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