We present a preference foundation for Chance Theory (CT), a model of decision making under uncertainty where the evaluation of an act depends distinctively on its lowest outcome. This outcome is evaluated with the riskless value function u and the potential increments over it are evaluated by...

Many studies document failures of expected utility’s key assumption, the independence axiom. Here, we show that independence can be decomposed into two distinct axioms - betweenness and homotheticity - and that these two axioms are necessary and sufficient for independence. Thus, independence...

Cerreia-Vioglio, Ghirardato, Maccheroni, Marinacci and Siniscalchi (Economic Theory, 48:341-375, 2011) have recently proposed a very general axiomatisation of preferences in the presence of ambiguity, viz. Monotonic Bernoullian Archimedean (MBA) preference orderings. This paper investigates the...

This paper extends Savage's subjective approach to probability and utility from decision problems under exogenous uncertainty to choice in strategic environments. Interactive uncertainty is modeled both explicitly, using hierarchies of preference relations, the analogue of beliefs hierarchies,...