Coherent decision analysis with inseparable probabilities and utilities

Published

Journal Article

This article explores the extent to which a decision maker's probabilities can be measured separately from his/her utilities by observing his/her acceptance of small monetary gambles. Only a partial separation is achieved: the acceptable gambles are partitioned into a set of "belief gambles," which reveals probabilities distorted by marginal utilities for money, and a set of "preference gambles," which reveals utilities reciprocally distorted by marginal utilities for money. However, the information in these gambles still enables us to solve the decision maker's problem: his/her utility-maximizing decision is the one that avoids arbitrage (i.e., incoherence or Dutch books). © 1995 Kluwer Academic Publishers.

Full Text

Duke Authors

Cited Authors

  • Nau, RF

Published Date

  • January 1, 1995

Published In

Volume / Issue

  • 10 / 1

Start / End Page

  • 71 - 91

Electronic International Standard Serial Number (EISSN)

  • 1573-0476

International Standard Serial Number (ISSN)

  • 0895-5646

Digital Object Identifier (DOI)

  • 10.1007/BF01211529

Citation Source

  • Scopus