Elements of the Utility Theory

The utility theoryUtility theory is concerned with analyzing the existence and the forms of numerical representations of preference relations. We start our presentation from abstract preference relations in a space \(\mathfrak {X}\) , which we call the prospect space.Prospect space Our considerations in this section are rather abstract, but in the applications to risk-averse decision-making that we discuss in this book, three special cases of \(\mathfrak {X}\) are particularly important.