Abstract
The Allais Paradox seems as fresh today as it was when first posed some 40 years ago. It has been discussed in the intervening decades and led to many suggestions for modifying, extending or abandoning standard subjective expected utility theory. It has also led to much discussion of the distinction between normative and descriptive models and their role in prescriptive decision support. It seems appropriate in a conference entitled Decision Making: towards the 21st Century to reflect on these developments, particularly in relation to recent extensions to utility theory and other mathematical models of preferences, and consider, in particular, their possible implication for prescriptive decision analysis.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Allais, M. (1953) Le comportement de l’homme rational devant le risque: Critique des postulats et axioms de l’école américaine. Econometr., 21, 503–46.
Allais, M. (1979) The foundations of a positive theory of choice involving risk and a criticism of the postulates and axioms of the American School, in Allais and Hagen (1979), 27–146.
Allais, M. and O. Hagen (Eds) (1979) Expected Utility Hypothesis and the Allais Paradox. D. Reidel.
Bell, D.E.(1982) Regret in decision making under uncertainty, Operations Research, 30, 961–81.
Bell, D.E. (1985) Disappointment in decision making, Operations Research, 33, 1–27.
Bell, D.E. and P. Farquhar (1986) Perspectives on utility theory, Operations Research, 34, 179–183.
Bell, D.E., H. Raiffa and A. Tversky (Eds) (1988) Decision Making: Descriptive, Normative and Prescriptive Interactions, Camb.U.P.
Birnbaum, M.H. (1992) Issues in utility measurement, Organisational Behaviour and Human Decision Processes, 52, 319–330.
Bordley, R.F. and G. Hazen (1991) SSB and weighted linear utility as expected utility with suspicion, Management Science, 37, 397–408.
Bordley, R.F. and G. Hazen (1992) Nonlinear utility models arising from unmodelled small world intercorrelations, Mgt. Science, 38, 1010–1017.
Box, G.E.P. (1980) Sampling and Bayes inference in statistical modelling (with discussion), J. Royal Stat. Soc, A143, 383–430.
Chew, S.H. and MacCrimmon, K.R. (1979) Alpha-nu choice theory: a generalisation of expected utility theory, Working paper 669, Univ. British Columbia.
Chew, S.H. (1980) Two representation theorems and their application to decision theory,PhD thesis, Univ. British Columbia.
Chew, S.H. (1983) A generalisation of the quasilinear mean with applications to the measurement of income inequality and decision theory resolving the Allais Paradox, Econometrica, 51, 1065–1092.
DeGroot, M.H. (1970) Optimal Statistical Decisions, McGraw Hill.
Dyer, J.S., P.C. Fishburn, R.E. Steuer, J. Wallenius, and S. Zionts (1992) Multiple criteria decision making, multiattribute utility theory: the next ten years,Management Science, 38, 645–654.
Ellsberg, D. (1961) Risk, ambiguity, and the Savage axioms, Quarterly Journal of Economics, 75, 643–69.
Fishburn, P.C. (1982) The Foundations of Expected Utility, D. Reidel.
Fishburn, P.C. (1983) Transitive measurable utility, Journal of Economic Theory, 31, 293–317.
Fishburn, P.C. (1988) Nonlinear Preference and Utility Theory, Wheat-sheaf Books.
French, S. (1983) A survey and interpretation of multi-attribute utility theory in French, S., R. Hartley, L.C. Thomas, and D.J. White, (Eds), Multi-objective Decision Making, Academic Press, 263–277.
French, S. (1986) Decision Theory: an Introduction to the Mathematics of Rationality, Ellis Horwood.
French, S., Ed (1989) Readings in Decision Analysis, Chapman and Hall.
French, S. (1992a) Uncertainty and Imprecision: Modelling and Analysis, presented at IMSIBAC 4, San Sebastian, August.
French, S. (1992b) The Role of Sensitivity Analysis in Decision Analysis in C. Holtham (Ed.) Executive Information Systems and Group Decision Support, Chapman and Hall, 99–123.
French, S. (1993) Utility: probability’s younger twin?, Research Report 98.7, School of Computer Studies, University of Leeds.
Geweke, J., Ed. (1992) Decision Making under Risk and Uncertainty, Kluwer.
Gilboa, I. (1987) Expected utility with purely subjective non-additive probabilities, Journal of Mathematical Economics, 16, 65–88.
Kahneman, D. and A. Tversky (1979) Prospect theory: an analysis of decision under risk,Econometrica, 47, 263–91.
Karmarkar, U. (1979) Subjectively weighted utility and the Allais Paradox, Organisational Behaviour and Human Performance, 24, 67–72.
Keeney, R.L. (1992) Value Focused Thinking, Harvard University Press.
Keren, G. (1992) Improving decisions and judgements: the desirable and the feasible, in Wright, G. and Boiger, F., Eds, Expertise and Decision Support, Plenum Press, 25–46.
Lichtenstein, S. and Slovic, P. (1971) Reversals of preferences between bids and choices in gambling decisions, Journal of Experimental Psychology, 89, 46–55.
Loomes, G. and Sugden, R. (1982) Regret theory: an alternative theory of rational choice under uncertainty, Econ. Jour., 92, 805–24.
Machina, M.J. (1987) Choice under uncertainty: problems solved and unsolved, Economic Perspectives, 1, 121–154.
Machina, M.J. (1991) Dynamic consistency and non-expected utility, in Bacharach, M. and Hurley, S., Eds, Foundations of Decision Theory, Blackwell, 39–91.
May, K.O. (1954) Intransitivity, utility, and the aggregation of preference patterns, Econometrica, 22, 1–13.
Nakamura, Y. (1985) Weighted utility theory, Preprint, Department of Precision Engineering, Osaka University, Japan.
Phillips, L.D. (1982) Requisite decision modelling: a case study, Journal of the Operational Research Society, 33, 303–311.
Phillips, L.D. (1984) A theory of requisite decision models, Acta Psychologica, 56, 29–48.
Rios Insua, D. (1990) Sensitivity Analysis in Multi-Objective Decision Making, Springer Verlag.
Schmeidler, D. (1989) Subjective probability and expected utility without additivity, Econometrica, 57, 571–587.
Slovic, P. (1969) Manipulating the attractiveness of a gamble without changing its expected value, J. Exper. Psych., 79, 139–145.
Slovic, P. and Tversky, A. (1974) Who accepts Savage’s axiom?, Behavioral Science, 19, 368–373.
Savage, L.J. (1954) The Foundations of Statistics, Wiley.
Sarin, R. and Wakker, P. (1992) A simple axiomatisation of non-additive expected utility, Econometrica, 60, 1255–1272.
Tversky, A. and Kahneman, D. (1988) Rational choice and the framing of decisions, in Bell et al (1988), 167–192.
Wakker, P.P. (1989) Continuous subjective expected utility with additivity, Journal of Mathematical Economics, 18, 1–27.
Wakker, P.P. (1991) Additive representations of preferences on rank-ordered sets I. The Algebraic approach, J. Math. Psych., 35, 501–531.
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 1994 Springer Science+Business Media New York
About this chapter
Cite this chapter
French, S., Xie, Z. (1994). A Perspective on Recent Developments in Utility Theory. In: RÃos, S. (eds) Decision Theory and Decision Analysis: Trends and Challenges. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-1372-4_2
Download citation
DOI: https://doi.org/10.1007/978-94-011-1372-4_2
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-010-4600-8
Online ISBN: 978-94-011-1372-4
eBook Packages: Springer Book Archive