About: Von Neumann–Morgenstern utility theorem

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In decision theory, the von Neumann–Morgenstern (VNM) utility theorem shows that, under certain axioms of rational behavior, a decision-maker faced with risky (probabilistic) outcomes of different choices will behave as if he or she is maximizing the expected value of some function defined over the potential outcomes at some specified point in the future. This function is known as the von Neumann–Morgenstern utility function. The theorem is the basis for expected utility theory.

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rdfs:label	Von Neumann–Morgenstern utility theorem (en)
rdfs:comment	In decision theory, the von Neumann–Morgenstern (VNM) utility theorem shows that, under certain axioms of rational behavior, a decision-maker faced with risky (probabilistic) outcomes of different choices will behave as if he or she is maximizing the expected value of some function defined over the potential outcomes at some specified point in the future. This function is known as the von Neumann–Morgenstern utility function. The theorem is the basis for expected utility theory. (en)
sameAs	Von Neumann–Morgenstern utility theorem
dbp:wikiPageUsesTemplate	dbt:Cite_journal dbt:Clarify dbt:ISBN dbt:Main dbt:Refbegin dbt:Reflist dbt:Rp dbt:Short_description
Subject	Theorems Utility Game theory John von Neumann
prov:wasDerivedFrom	http://en.wikipedia.org/wiki/Von_Neumann–Morgenstern_utility_theorem?oldid=1044421624&ns=0
Wikipage page ID	26898094 (xsd:integer)
page length (characters) of wiki page	20327 (xsd:nonNegativeInteger)
Wikipage revision ID	1044421624 (xsd:integer)
has abstract	In decision theory, the von Neumann–Morgenstern (VNM) utility theorem shows that, under certain axioms of rational behavior, a decision-maker faced with risky (probabilistic) outcomes of different choices will behave as if he or she is maximizing the expected value of some function defined over the potential outcomes at some specified point in the future. This function is known as the von Neumann–Morgenstern utility function. The theorem is the basis for expected utility theory. In 1947, John von Neumann and Oskar Morgenstern proved that any individual whose preferences satisfied four axioms has a utility function; such an individual's preferences can be represented on an interval scale and the individual will always prefer actions that maximize expected utility. That is, they proved that an agent is (VNM-)rational if and only if there exists a real-valued function u defined by possible outcomes such that every preference of the agent is characterized by maximizing the expected value of u, which can then be defined as the agent's VNM-utility (it is unique up to adding a constant and multiplying by a positive scalar). No claim is made that the agent has a "conscious desire" to maximize u, only that u exists. The expected utility hypothesis is that rationality can be modeled as maximizing an expected value, which given the theorem, can be summarized as "rationality is VNM-rationality". However, the axioms themselves have been critiqued on various grounds, resulting in the axioms being given further justification. VNM-utility is a decision utility in that it is used to describe decision preferences. It is related but not equivalent to so-called E-utilities (experience utilities), notions of utility intended to measure happiness such as that of Bentham's Greatest Happiness Principle. (en)
foaf:isPrimaryTopicOf	http://en.wikipedia.org/wiki/Von_Neumann–Morgenstern_utility_theorem
is Wikipage redirect of	Von Neumann-Morgenstern utility theorem Reduction of compound lotteries Neumann-Morgenstern utility theorem Compound lottery Compound lottery reduction Von Neumann-Morgenstern axioms Von Neumann-Morgenstern utilities Von Neumann-Morgenstern utility Von Neumann Morgenstern utility Von Neumann–Morgenstern axioms Von Neumann–Morgenstern utility
is Link from a Wikipage to another Wikipage of	List of things named after John von Neumann Ambiguity aversion Approval voting Austrian School Bargaining Cardinal utility History of microeconomics Jean-François Mertens Debreu theorems Contract theory Epstein–Zin preferences Independence of irrelevant alternatives Expected utility hypothesis Health Utilities Index Influence diagram Intertemporal CAPM John von Neumann Larry Temkin Multi-attribute utility Neumann-Morgenstern utility theorem Compound lottery Compound lottery reduction
is known for of	John von Neumann

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