Expected Utility Hypotheses and the Allais Paradox

1. Front Matter

   Pages i-vii

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2. Editorial Introduction

   1. Front Matter

      Pages 1-11

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   2. Introductory Survey

      • Ole Hagen

      Pages 13-24

3. The 1952 Allais Theory of Choice Involving Risk

   1. Front Matter

      Pages 25-25

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   2. The Foundations of a Positive Theory of Choice Involving Risk and a Criticism of the Postulates and Axioms of the American School (1952)

      • Maurice Allais

      Pages 27-145

4. The Neo-Bernoullian Position Versus the 1952 Allais Theory

   1. Front Matter

      Pages 147-147

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   2. Critical Examination of the New Foundation of Utility

      • Yakov Amihud

      Pages 149-160

   3. A Short Confirmation of my Standpoint

      • Bruno de Finetti

      Pages 161-161

   4. Utilities, Psychological Values, and the Training of Decision Makers

      • J. Marschak

      Pages 163-174

   5. Some Reflections on Utility

      • Oskar Morgenstern

      Pages 175-183

   6. A Reply to Allais

      • Yakov Amihud

      Pages 185-190

5. Contemporary Views on the NEO-Bernoullian Theory and the Allais Paradox

   1. Front Matter

      Pages 191-191

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   2. Utility and Stochastic Dominance

      • Karl Borch

      Pages 193-201

   3. Maximizing Expected Utility and the Rule of Long Run Success

      • A. Camacho

      Pages 203-222

   4. Adaptive Utility

      • Richard M. Cyert, Morris H. Degroot

      Pages 223-241

   5. On the Nature of Expected Utility

      • Peter C. Fishburn

      Pages 243-257

   6. The St. Petersburg Puzzle

      • Samuel Gorovitz

      Pages 259-270

   7. Towards a Positive Theory of Preferences under Risk

      • Ole Hagen

      Pages 271-302

   8. The Naturalistic Versus the Intuitionistic School of Values

      • Werner Leinfellner, Edward Booth

      Pages 303-332

   9. Utility Theory: Axioms Versus ‘Paradoxes’

      • Kenneth R. MacCrimmon, Stig Larsson

      Pages 333-409

Utility theory or, value theory in general, is certainly the cornerstone of decision theory, game theory, microecon~mics, and all social and political theories which deal with public decisions. Recently the American School of utility, founded by von N eumann­ Morgenstern, encountered a far-going criticism by the French School of utility represented by its founder Allais. The whole basis of the theory of decisions involving risk has been shaken and put into question. Consequently, basic research in the fundamentals of utility and value theory evolved into a crisis. Like any crisis in basic research, and this one was not an exception, it was very fruitful. One may simply say: Allais versus von Neumann-Morgenstern, or the French School of utility versus the American School, became one of the battlefields of scientific development which proved to be a most creative source of new advances and new developments in all those sciences which are based on evaluation of utilities.

• basic research
• crisis
• criticism
• decision theory
• development
• evaluation
• game theory
• nature
• research
• school

• Centre d’Analyse Economique, Ecole Nationale Supérieure des Mines de Paris, Centre National de la Recherche Scientifique, France

  Maurice Allais

• Bedriftsoekonomisk Institutt, Oslo Institute of Business Administration, Norway

  Ole Hagen

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