Showing papers on "Von Neumann–Morgenstern utility theorem published in 1970"

Utility theory for decision making

Abstract: : The book presents a concise yet mathematically complete treatment of modern utility theories that covers nonprobabilistic preference theory, the von Neumann-Morgenstern expected-utility theory and its extensions, and the joint axiomatization of utility and subjective probability.

Homogeneous von neumann-morgenstern utility functions*

Abstract: that an individual's preferences can be represented by an ordinal utility function which is "homogeneous" (i.e., an increasing monotonic transformation of a function homogeneous of degree one). Friedman [2] and Modigliani and Brumberg [3] use this assumption in their theories of the consumption function. Radner's turnpike theorem [6] [7] requires that the planner's preferences among terminal states can be represented by a homogeneous utility function. And Tobin [11, (7-11)] in his discussion of portfolio selection for mixed target dates, seems to make implicit use of the homogeneity assumption. 2 The assumption that an individual's ordinal utility function is "homogeneous" can be translated into an equivalent assumption about his preferences. Definition. Let U(X) be an ordinal utility function, where X denotes the vector (xI, *., XT).3 If there exists a function f(X), homogeneous of degree one, and a twice differentiable function F, F' > 0, such that F[U(X)] = f(X),