Axiomatization of weighted (separable) utility
Blavatskyy, P. (2014) Axiomatization of weighted (separable) utility. Journal of Mathematical Economics, 54 (October). pp. 138-142.
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Nontrivial decision problems typically involve a trade-off among multiple attributes of choice options. One simple way of resolving such trade-offs is to aggregate multiple attributes into one real-valued index, known as weighted or separable utility. Applications of weighted utility can be found in choice under risk (expected utility) and uncertainty (subjective expected utility), intertemporal choice (discounted utility) and welfare economics (utilitarian social welfare function). This paper presents an alternative behavioral characterization (preference axiomatization) of weighted utility. It is shown that necessary and sufficient conditions for weighted utility are completeness, continuity, bi-separable transitivity (and transitivity if none of the attributes is null, or inessential).
|Publication Type:||Journal Article|
|Murdoch Affiliation:||School of Management and Governance|
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