TY - JOUR
T1 - Decomposable Choice under Uncertainty
AU - Grant, Simon
AU - Kajii, Atsushi
AU - Polak, Ben
PY - 2000/6
Y1 - 2000/6
N2 - Savage motivated his sure-thing principle by arguing that, whenever an act would be preferred if an event obtains and preferred if that event did not obtain, it should be preferred overall. The ability to decompose and recompose decision problems in this way has normative appeal. It does not, however, require the full separability embodied in Savage's axiom. We formulate a weaker axiom that suffices for decomposability, and show it is almost equivalent to Gul and Lantto's dynamic programming solvability property. Given probabilistic sophistication, weak decomposability is equivalent to betweenness. Without probabilistic sophistication, weak decomposability implies an implicit additive representation. Journal of Economic Literature Classification Numbers: D80, D81.
AB - Savage motivated his sure-thing principle by arguing that, whenever an act would be preferred if an event obtains and preferred if that event did not obtain, it should be preferred overall. The ability to decompose and recompose decision problems in this way has normative appeal. It does not, however, require the full separability embodied in Savage's axiom. We formulate a weaker axiom that suffices for decomposability, and show it is almost equivalent to Gul and Lantto's dynamic programming solvability property. Given probabilistic sophistication, weak decomposability is equivalent to betweenness. Without probabilistic sophistication, weak decomposability implies an implicit additive representation. Journal of Economic Literature Classification Numbers: D80, D81.
KW - Sure-thing principle; decomposability; uncertainty; dynamic programming solvability; nonexpected utility; betweenness
UR - http://www.scopus.com/inward/record.url?scp=0041642788&partnerID=8YFLogxK
U2 - 10.1006/jeth.2000.2644
DO - 10.1006/jeth.2000.2644
M3 - Article
SN - 0022-0531
VL - 92
SP - 169
EP - 197
JO - Journal of Economic Theory
JF - Journal of Economic Theory
IS - 2
ER -