Objective Utility, Subjective Utility, and Combined

The Price Theory II class crashed through these three topics within three 80minutes lectures (spoiler alert: we are also going to finish Arrow’ Impossibility Theorem for voting in one). Though the logic sequence goes vNM -> Savage -> Anscombe-Aumann. vNM and anscombe-aumann’s space of alternative has good topological structure, so the intuition is easier. But Savage’s version is discrete hence makes it complicated.

• Von Neumann–Morgenstern utility theorem Wikipedia Page

• Savage’s subjective expected utility model Wikipedia Page

  Additional reference: Notes on the Theory of Choice, Chapter 8 - 9. David Kreps (1988)

• Anscombe-Aumann subjective expected utility model Wikipedia Page