Econometrica

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, 1972, Volume 40, Issue 2

Finite State Space and Expected Utility Maximization

https://www.jstor.org/stable/1909404
p. 253-259

Bernt P. Stigum

In this paper we give necessary and sufficient conditions such that a decision maker who operates in a world in which finitely many states of nature can occur has an increasing, strictly concave utility function U(.) and a subjective probability measure P(.) and such that he chooses among acts with uncertain outcomes according to the expected value of U(.) (with respect to P(.)) which they offer him.


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