Expected Utility without Utility
expected utility | cardinal utility | stochastic dominance | expected utility, cardinal utility, benchmark, risk attitude, stochastic dominance | Dati non disponibili | risk attitude | benchmark
This paper advances an interpretation of Von Neumann–Morgenstern’s expected utility model for preferences over lotteries which does not require the notion of a cardinal utility over prizes and can be phrased entirely in the language of probability. According to it, the expected utility of a lottery can be read as the probability that this lottery outperforms another given independent lottery. The implications of this interpretation for some topics and models in decision theory are considered.