Decomposable Choice under Uncertainty

Simon Grant, Atsushi Kajii, Ben Polak

    Research output: Contribution to journalArticlepeer-review

    14 Citations (Scopus)

    Abstract

    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.

    Original languageEnglish
    Pages (from-to)169-197
    Number of pages29
    JournalJournal of Economic Theory
    Volume92
    Issue number2
    DOIs
    Publication statusPublished - Jun 2000

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