From Outcomes to Acts: A Non-Standard Axiomatization of the Expected Utility Principle
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This paper presents an axiomatization of the principle of maximizing ex-pected utility that does not rely on the independence axiom or sure-thing principle. Perhaps more importantly the new axiomatization is based on an ex ante approach, instead of the standard ex post approach. An ex post approach utilizes the decision maker's preferences among risky acts for generating a utility and a probability function, whereas in the ex ante approach a set of preferences among potential outcomes are on the input side of the theory and the decision maker's preferences among risky acts on the output side. 2004 Kluwer Academic Publishers.