Expected Utility Hypotheses and the Allais Paradox: Contemporary Discussions of the Decisions Under Uncertainty with Allais' Rejoinder (Theory and Decision Library, 21)

Utility theory or, value theory in general, is certainly the cornerstone of decision theory, game theory, microecon~mics, and all social and political theories which deal with public decisions. Recently the American School of utility, founded by von N eumann­ Morgenstern, encountered a far-going criticism by the French School of utility represented by its founder Allais. The whole basis of the theory of decisions involving risk has been shaken and put into question. Consequently, basic research in the fundamentals of utility and value theory evolved into a crisis. Like any crisis in basic research, and this one was not an exception, it was very fruitful. One may simply say: Allais versus von Neumann-Morgenstern, or the French School of utility versus the American School, became one of the battlefields of scientific development which proved to be a most creative source of new advances and new developments in all those sciences which are based on evaluation of utilities. Front Matter....Pages i-vii Front Matter....Pages 1-11 Introductory Survey....Pages 13-24 Front Matter....Pages 25-25 The Foundations of a Positive Theory of Choice Involving Risk and a Criticism of the Postulates and Axioms of the American School (1952)....Pages 27-145 Front Matter....Pages 147-147 Critical Examination of the New Foundation of Utility....Pages 149-160 A Short Confirmation of my Standpoint....Pages 161-161 Utilities, Psychological Values, and the Training of Decision Makers....Pages 163-174 Some Reflections on Utility....Pages 175-183 A Reply to Allais....Pages 185-190 Front Matter....Pages 191-191 Utility and Stochastic Dominance....Pages 193-201 Maximizing Expected Utility and the Rule of Long Run Success....Pages 203-222 Adaptive Utility....Pages 223-241 On the Nature of Expected Utility....Pages 243-257 The St. Petersburg Puzzle....Pages 259-270 Towards a Positive Theory of Preferences under Risk....Pages 271-302 The Naturalistic Versus the Intuitionistic School of Values....Pages 303-332 Utility Theory: Axioms Versus ‘Paradoxes’....Pages 333-409 Comparison of Decision Models and Some Suggestions....Pages 411-433 Front Matter....Pages 435-435 The So-Called Allais Paradox and Rational Decisions under Uncertainty....Pages 437-681 Back Matter....Pages 683-715