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DECISION THEORY WITHOUT FINITE STANDARD EXPECTED VALUE

Published online by Cambridge University Press:  13 August 2015

Luc Lauwers  and
Peter Vallentyne
Luc Lauwers
Affiliation:
KU Leuven, Faculty of Economics and Business, Naamsestraat 69 – bus 3565, 3000 Leuven, Belgium. Email: Luc.Lauwers@kuleuven.be. URL: http://feb.kuleuven.be/luc.lauwers.
Peter Vallentyne
Affiliation:
University of Missouri, 406 Strickland Hall, Columbia, MO 65211-4160, USA. Email: vallentynep@missouri.edu. URL: http://Klinechair.missouri.edu.
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Abstract:

We address the question, in decision theory, of how the value of risky options (gambles) should be assessed when they have no finite standard expected value, that is, where the sum of the probability-weighted payoffs is infinite or not well defined. We endorse, combine and extend (1) the proposal of Easwaran (2008) to evaluate options on the basis of their weak expected value, and (2) the proposal of Colyvan (2008) to rank options on the basis of their relative expected value.

Keywords

Pasadena paradoxexpected valueweak expectationsrelative expectations

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Type
Articles
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Economics & Philosophy , Volume 32 , Issue 3 , November 2016 , pp. 383 - 407
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Copyright © Cambridge University Press 2015 

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