Suppose that there are two decision makers, with preference relations that admit a vNM representation using utility
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Suppose that there are two decision makers, with preference relations that admit a vNM representation using utility functions u1 and u2. They communicate their utility functions to a third person, who computes a function u = 1 2 u1 + 1 2 u2. Under what conditions is u a utility function? Suppose that the third person derives a preference relation >u from u according to the vNM representation. Give an example where >u coincides with the preference relation of the first decision maker in some cases, and with the preference relation of the second decision maker in other cases.
Related Book For
Statistics for Management and Economics Abbreviated
ISBN: 978-1285869643
10th Edition
Authors: Gerald Keller
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