Testable Implications of Subjective Expected Utility Theory

Posted: 22 Jun 2006

See all articles by Eduardo Zambrano

Eduardo Zambrano

California State Polytechnic University, San Luis Obispo - Economics

Abstract

I show that the predictive content of the hypothesis of subjective expected utility maximization critically depends on what the analyst knows about the details of the problem a particular decision maker faces. When the analyst does not know anything about the agentĀ“s payoffs or beliefs and can only observe the sequence of actions taken by the decision maker any arbitrary sequence of actions can be implemented as the choice of an agent that solves some intertemporal utility maximization problem under uncertainty.

Keywords: Intertemporal decision theory under uncertainty, Testable implications, Savage-Bayesian rationality

JEL Classification: D81, D83

Suggested Citation

Zambrano, Eduardo, Testable Implications of Subjective Expected Utility Theory. Games and Economic Behavior, Vol. 53, No. 2, pp. 262-268, 2005. Available at SSRN: https://ssrn.com/abstract=907058

Eduardo Zambrano (Contact Author)

California State Polytechnic University, San Luis Obispo - Economics ( email )

Orfalea College of Business
San Luis Obispo, CA 93407
United States
805-756-5327 (Phone)
805-756-1473 (Fax)

HOME PAGE: http://calpoly.edu/~ezambran

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