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Published August 1994 | metadata_only
Journal Article

Dynamic Consistency Implies Approximately Expected Utility Preferences


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.

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.

Additional details

August 20, 2023
August 20, 2023