Hostname: page-component-586b7cd67f-rdxmf Total loading time: 0 Render date: 2024-11-25T22:21:41.696Z Has data issue: false hasContentIssue false
  • English
  • Français

Costs of abandoning the Sure-Thing Principle

Published online by Cambridge University Press:  01 January 2020

Rachael Briggs
Rachael Briggs*
Affiliation:
Stanford University, Stanford, CA, USA
*
Email: rbriggs@stanford.edu
Get access Rights & Permissions [Opens in a new window]

Abstract

Risk-weighted expected utility theory (REU theory for short) permits preferences which violate the Sure-Thing Principle (STP for short). But preferences that violate the STP can lead to bad decisions in sequential choice problems. In particular, they can lead decision-makers to adopt a strategy that is dominated – i.e. a strategy such that some available alternative leads to a better outcome in every possible state of the world.

Keywords

Risk-weighted expected utilitySure-Thing Principleexpected utilitydecision theoryallais paradox
Type
Articles
Information
Canadian Journal of Philosophy , Volume 45 , Issue 5-6: Special Issue: Belief, Action, and Rationality over Time , December 2015 , pp. 827 - 840
Copyright
Copyright © Canadian Journal of Philosophy 2015

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Allais, Maurice. 1953. “Le comportement de l’homme rationnel devant le risque: critique des postulats et axiomes de l’è;cole amè;ricaine.” Econometrica 21 (4): 503–546.Google Scholar
Buchak, Lara. 2013. Risk and Rationality. Oxford: OUP.CrossRefGoogle Scholar
Hammond, Peter J. 1988. “Consequentialist Foundations for Expected Utility.” Theory and Decision 25 (1):25–78.CrossRefGoogle Scholar
Machina, Mark. 1989. “Dynamic Consistency and Non-expected Utility Models of Choice Under Uncertainty.” Journal of Economic Literature 27 (4): 1622–1668.Google Scholar
McClennen, Edward F. 1990. Rationality and Dynamic Choice: Foundational Explorations. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Savage, Leonard J. 1954. The Foundations of Statistics. New York: Wiley Publications in Statistics.Google Scholar