- A Unified Derivation of Classical Subjective Expected Utility Models through Cardinal Utility
- Journal of mathematical economics
- Pages (from-to)
- Document type
- Faculty of Economics and Business (FEB)
- Amsterdam School of Economics Research Institute (ASE-RI)
Classical foundations of expected utility were provided by Ramsey, de Finetti, von Neumann & Morgenstern, Anscombe & Aumann, and others. These foundations describe preference conditions to capture the empirical content of expected utility. The assumed preference conditions, however, vary among the models and a unifying idea is not readily transparent. Providing such a unifying idea is the purpose of this paper. The mentioned derivations have in common that a cardinal utility index for outcomes, independent of the states and probabilities, can be derived. Characterizing that feature provides the unifying idea of the mentioned models.
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