Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Mar, 1997, Volume 65, Issue 2

Conditioning and Aggregation of Preferences<347:CAAOP>2.0.CO;2-R
p. 347-367

Costis Skiadas

This paper develops a general framework for modeling choice under uncertainty that extends subjective expected utility to include nonseparabilities, state-dependence, and the effect of subjective or ill defined consequences. This is accomplished by not including consequences among the formal primitives. Instead, the effect of consequences is modeled indirectly, through conditional preferences over acts. The main results concern the aggregation of conditional utilities to form an unconditional utility, including the case of additive aggregation. Applications, obtained by further specifying the structure of acts and conditional preferences, include disappointment, regret, and the subjective value of information.

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