Abstract
Axioms on the preference ordering of infinite sequences of a finite number of prizes are used to derive utility indices for these prizes which are constant up to positive linear transformations and satisfy certain conditions. These utility indices and “the rule of long run success” which is formally stated in the paper are then used to determine how an individual should rank lotteries assigning the different prizes with given probabilities. The implications of our results are finally discussed in relation to the von Neumann-Morgenstern axioms and a contention made by M. Allais in his 1953 Econometrica paper.
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© 1979 Springer Science+Business Media Dordrecht
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Camacho, A. (1979). Maximizing Expected Utility and the Rule of Long Run Success. In: Allais, M., Hagen, O. (eds) Expected Utility Hypotheses and the Allais Paradox. Theory and Decision Library, vol 21. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-7629-1_9
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DOI: https://doi.org/10.1007/978-94-015-7629-1_9
Publisher Name: Springer, Dordrecht
Print ISBN: 978-90-481-8354-8
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