The Mind under the Axioms

Introduction

I.1 Axioms are not mindless

In this book, we will deal with some aspects of the most well-known axiomatic systems of decision-theory: namely, expected utility theory (von Neumann and Morgenstern’s model) and subjective expected utility theory (Savage’s model). Only occasionally we will turn to the discussion of so-called alternative expected utility models, such as prospect theory. This can seem paradoxical for a book that appears in a series in behavioral economics. Prospect theory is often conceived as the birthmark of behavioral economics. We will try to convince the reader that it is not a counterintuitive or simple provocative move and that the most standard axiomatic systems in decision-theory raise a lot of behavioral and psychological ...