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Handbook of the Economics of Risk and Uncertainty
book

Handbook of the Economics of Risk and Uncertainty

by Mark Machina, W. Kip Viscusi
November 2013
Beginner content levelBeginner
896 pages
35h 10m
English
North Holland
Content preview from Handbook of the Economics of Risk and Uncertainty
Edi Karni
16
The second axiom, which is analogous to Savage’s P.5, requires that the decision
maker not be indifferent among all acts. Formally:
(A.5) (Nontriviality) There are acts h and
h
in H such that
h h
.
Preference relations that have the structure depicted by the axioms (A.1)–(A.5) have
subjective expected utility representations.
Theorem1.6 (Anscombe and Aumann) Let
be a binary relation on H. Then
is
a weak-order satisfying Archimedean, independence, state independence and nontriviality if and
only if there exists a real-valued function, u, on X and a probability measure π on S such that
is represented by
Moreover, u is unique ...
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Publisher Resources

ISBN: 9780444536853