Axiomatization of weighted (separable) utility

Blavatskyy, P. (2014) Axiomatization of weighted (separable) utility. Journal of Mathematical Economics, 54 (October). pp. 138-142.

Abstract

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).

Item Type:	Journal Article
Murdoch Affiliation(s):	School of Management and Governance
Publisher:	Elsevier
Copyright:	Elsevier
URI:	http://researchrepository.murdoch.edu.au/id/eprint/27131

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