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Dynamic Consistency Implies Approximately Expected Utility Preferences

Border, Kim C. and Segal, Uzi (1994) Dynamic Consistency Implies Approximately Expected Utility Preferences. Journal of Economic Theory, 63 (2). pp. 170-188. ISSN 0022-0531.

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Machina has proposed a definition of dynamic consistency which admits non-expected utility functionals. We show that even under this new definition a dynamically consistent preference relation that is differentiable becomes arbitrarily close to an expected utility preference after the realization of a low probability event.

Item Type:Article
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URLURL TypeDescription ItemWorking Paper
Border, Kim C.0000-0003-4437-0524
Additional Information:© 1994 Academic Press. Received May 17, 1992; Revised May 20, 1993. We thank Eddie Dekel, Larry Epstein, Mark Machina, and Joe Ostroy for fruitful and stimulating discussions. We also thank an associate editor and a referee for valuable comments.
Issue or Number:2
Classification Code:JEL: D81
Record Number:CaltechAUTHORS:20170829-155548155
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Official Citation:Kim C. Border, Uzi Segal, Dynamic Consistency Implies Approximately Expected Utility Preferences, Journal of Economic Theory, Volume 63, Issue 2, August 1994, Pages 170-188, ISSN 0022-0531, (
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80934
Deposited By: Tony Diaz
Deposited On:30 Aug 2017 17:06
Last Modified:03 Oct 2019 18:36

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