Expected Balanced Uncertain Utility

[Simon Grant]

Dear All,

Berend Roorda, Jingni Yang and I have just completed a reversion of our paper “Expected Balanced Uncertain Utility”, a copy of which is available by clicking on the following link:

https://www.dropbox.com/scl/fi/gfo12o0lefkdpd742tlmp/EBUU240626.pdf?rlkey=uj8rn3cxnq2uvdszehhveaziv&dl=0

Abstract:

We introduce and analyze expected balanced uncertain utility (EBUU) theory. A prior and a 

balanced outcome-set utility characterize an EBUU decision maker.  Conditional on a reference or 

``balancing value'', the latter assigns a utility to each outcome-set.   The decision maker associates 

with each act, its envelope, the minimal measurable mapping from states to outcome-sets that contains 

the act. She then (implicitly) ranks an act  according to the balancing value at which the expected balanced utility 

of its associated envelope is zero.  As a consequence her risk preferences need only exhibit betweenness allowing 

for behavior that can accommodate Allais-type paradoxes. 

Regards,

Simon.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Simon Grant, 
John C. Harsanyi Professor of Economics
Research School of Economics, 
HW Arndt Building 25A, Kingsley St
The Australian National University
ACT 2600, Australia ​
(Ph)+61-(0)466 522 603
simon...@anu.edu.au
Personal Website

TEQSA Provider ID: PRV12002 (Australian University) 
CRICOS Provider: 00120C
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~