Subjective expected utility with state-dependent but action/observation-independent preferences

Under state-dependent preferences, probabilities and units of scale of statedependent utilities are not separately identified, in standard models: only their products matter to decisions. Separate identification has been studied under implicit actions (Dreze 1987) or under explicit actions and obser...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Author Dreze, J
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2015
Subjects
Expected utility
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Summary:Under state-dependent preferences, probabilities and units of scale of statedependent utilities are not separately identified, in standard models: only their products matter to decisions. Separate identification has been studied under implicit actions (Dreze 1987) or under explicit actions and observations (Karni 2011). This paper complements both approaches and relates them.