Affiliation:
1. Department of Quantitative Finance, University of Freiburg
Abstract
Savage (1954) provided the first axiomatic characterization of expected utility without relying on any given probabilities or utilities. It is the most famous preference axiomatization existing. This note shows that Savage's axiom P3 is implied by the other axioms, which reveals its redundancy. It is remarkable that this was not noticed before as Savage's axiomatization has been studied and taught by hundreds of researchers for more than six decades.
Subject
Economics and Econometrics
Cited by
11 articles.
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