The Sequential Dominance Argument for the Independence Axiom of Expected Utility Theory
| Autor: | Johan E. Gustafsson |
|---|---|
| Rok vydání: | 2020 |
| Předmět: |
Axiom independence
05 social sciences Rationality 06 humanities and the arts 0603 philosophy ethics and religion 050105 experimental psychology Philosophy Lottery Dominance (ethology) History and Philosophy of Science Argument Irrational number 060302 philosophy Economics Independence (mathematical logic) 0501 psychology and cognitive sciences Mathematical economics Expected utility hypothesis |
| Zdroj: | Philosophy and Phenomenological Research. 103:21-39 |
| ISSN: | 1933-1592 0031-8205 |
| DOI: | 10.1111/phpr.12669 |
| Popis: | Independence is the condition that, if X is preferred to Y, then a lottery between X and Z is preferred to a lottery between Y and Z given the same probability of Z. Is it rationality required that one’s preferences conform to Independence? The main objection to this requirement is that it would rule out the alleged rationality of Allais and Ellsberg Preferences. In this paper, I put forward a sequential dominance argument with fairly weak assumptions for a variant of Independence (called Independence for Constant Prospects), which shows that Allais and Ellsberg Preferences are irrational. Hence this influential objection (that is, the alleged rationality of Allais and Ellsberg Preferences) can be rebutted. I also put forward a number of sequential dominance arguments that various versions of Independence are requirements of rationality. One of these arguments is based on very minimal assumptions, but the arguments for the versions of Independence which are strong enough to serve in the standard axiomatization of Expected Utility Theory need notably stronger assumptions. |
| Databáze: | OpenAIRE |
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