Faculty of Industrial Engineering and Management
Israel–Technion City - Haifa 32000
‫הפקולטה להנדסת תעשיה וניהול‬
32000 ‫קריית הטכניון – חיפה‬
‫סמינר בתורת המשחקים‬
http://ie.technion.ac.il/Labs/Seminar/seminar.php?3
Speaker: Yuval Heller
School of Mathematical Sciences, Tel-Aviv
University
Weaker axiomatization of rational
choice
A DM (decision maker) has to choose an act given some uncertainty about the state of nature. Existing
models of rational choice assume that the choice correspondence of the DM satisfies the weak axiom of
revealed preference. This implies that the DM has a transitive preference relation over the set of all
acts, such that the chosen acts are those that are maximal according to this relation. In this paper we
demonstrate why the weak axiom is too strong in some situations. We present a weaker axiomatization:
the standard axioms of non-triviality, monotonicity, independence and continuity; together with a few
axioms that are implied by the weak axiom, and that seems to hold in a wider range of situations of
rational choice. We prove that this axiomatization is equivalent to the following numerical
representation: the DM has a unique convex and closed set of possible priors over the state of nature,
and a vN-M utility function u (unique up to linear transformations), such that an act f is chosen if and
only if there exists a possible prior such that pu(f)>=pu(g) for every possible act g.
6.5.2009 ‫ההרצאה תתקיים ביום רביעי‬
‫ בנין בלומפילד‬527 ‫ בחדר‬10:30 ‫בשעה‬