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The Problem of State-Dependent Utility: A Reappraisal

Baccelli, Jean (2019) The Problem of State-Dependent Utility: A Reappraisal. [Preprint]

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Abstract

State-dependent utility is a problem for the behavioral branch of decision theory under uncertainty. It questions the very possibility that beliefs be revealed by choice data. According to the current literature, all models of beliefs are equally exposed to the problem. Moreover, the problem is solvable only when the decision-maker can influence the resolution of uncertainty. This paper gives grounds to reject these two views. The various models of beliefs can be shown to be unequally exposed to the problem of state-dependent utility. The problem can be argued to be solved even when the decision-maker has no influence over the resolution of uncertainty. The implications of such reappraisal for a philosophical appreciation of the revealed preference methodology are discussed.


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Item Type: Preprint
Creators:
CreatorsEmailORCID
Baccelli, Jeanjean.baccelli@gmail.com0000-0003-0275-0377
Keywords: decision theory, decision theory under uncertainty, revealed preference, beliefs, subjective probability, state-dependent utility, moral hazard, expected utility, non-expected utility, philosophy of economics
Subjects: General Issues > Decision Theory
Specific Sciences > Economics
General Issues > Game Theory
Specific Sciences > Psychology > Judgment and Decision Making
General Issues > Logical Positivism/Logical Empiricism
General Issues > Operationalism/Instrumentalism
Specific Sciences > Probability/Statistics
Specific Sciences > Psychology
Depositing User: Jean Baccelli
Date Deposited: 17 Jul 2019 03:41
Last Modified: 17 Jul 2019 03:41
Item ID: 16228
Official URL: https://academic.oup.com/bjps/advance-article-abst...
DOI or Unique Handle: 10.1093/bjps/axz024
Subjects: General Issues > Decision Theory
Specific Sciences > Economics
General Issues > Game Theory
Specific Sciences > Psychology > Judgment and Decision Making
General Issues > Logical Positivism/Logical Empiricism
General Issues > Operationalism/Instrumentalism
Specific Sciences > Probability/Statistics
Specific Sciences > Psychology
Date: 2019
URI: http://philsci-archive.pitt.edu/id/eprint/16228

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