Quasi-separable preferences

Utility functions often lack additive separability, presenting an obstacle for decision theoretic axiomatizations. We address this challenge by providing a representation theorem for utility functions of quasi-separable preferences of the form u ( x , y , z ) = f ( x , z ) + g ( y , z ) on subsets o...

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Bibliographic Details
Published inTheory and decision Vol. 96; no. 4; pp. 555 - 595
Main Authors Qin, Wei-zhi, Rommeswinkel, Hendrik
Format Journal Article
LanguageEnglish
Published New York Springer US 01.06.2024
Springer Nature B.V
Subjects
Behavioral/Experimental Economics
Consumption
Decision theory
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Elicitation
Finance
Game Theory
Inequality
Insurance
Management
Operations Research/Decision Theory
Social and Behav. Sciences
Statistics for Business
Subsets
Utility functions
Utility
Preferences
Conditional separability
Additive separability
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Summary:Utility functions often lack additive separability, presenting an obstacle for decision theoretic axiomatizations. We address this challenge by providing a representation theorem for utility functions of quasi-separable preferences of the form u ( x , y , z ) = f ( x , z ) + g ( y , z ) on subsets of topological product spaces. These functions are additively separable only when holding z fixed but are cardinally comparable for different values of z . We then generalize the result to spaces with more than three dimensions and provide applications to belief elicitation, inequity aversion, intertemporal choice, and rank-dependent utility.
ISSN:0040-5833
1573-7187
DOI:10.1007/s11238-023-09962-8