Explore BrainMass

Explore BrainMass

    five axioms of choice under uncertainty

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Please explain utility theory----five axioms of choice under uncertainty (axioms of cardinal utility)

    © BrainMass Inc. brainmass.com March 4, 2021, 6:00 pm ad1c9bdddf
    https://brainmass.com/economics/utility/five-axioms-of-choice-under-uncertainty-23213

    Solution Preview

    to develop a theory of rational decision making in the face of uncertainty, it is necessary to make precise assumptions about an individual's behavior----known as axioms of cardinal utility.

    Axiom 1 Completeness
    For the entire set S of uncertain alternatives either
    X is preferred to y: (x>y)*
    Y is preferred to x: (y>x)
    Individual is indifferent to x and y (x~y)
    *> or < is not mathematical inequality, ...

    Solution Summary

    Summarize five axioms of choice under uncertainty.

    $2.19

    ADVERTISEMENT