Subjective expected utility theory

2012 ◽  
Author(s):  
James Shanteau ◽  
Alleene M. Ferguson Pingenot
Keyword(s):  
Expected Utility ◽  
Utility Theory ◽  
Expected Utility Theory ◽  
Subjective Expected Utility ◽  
Subjective Expected Utility Theory

scholarly journals On the Rejectability of the Subjective Expected Utility Theory

2016 ◽  
Vol 16 (2) ◽  
Author(s):  
Konrad Grabiszewski
Keyword(s):  
State Space ◽  
Expected Utility ◽  
Utility Theory ◽  
Expected Utility Theory ◽  
Subjective Expected Utility ◽  
Subjective Expected Utility Theory ◽  
Robustness Check

AbstractState space, a key element of the Subjective Expected Utility (SEU) theory, is not observable. This implies that, in order to test the SEU theory, it is necessary to assume some state space. Consequently, if the SEU theory is rejected, then it is appropriate to conduct a robustness check; that is, to search for a different state space and a probability over that state space which together do not lead to the rejection of the SEU theory. To find such state space and probability means to SEU-rationalize the agent’s behavior. I show how to conduct the process of SEU-rationalization and determine when an SEU-rationalization is possible.

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