Economics and Finance

    

An Inequality for Experimentally Testing the Violation of Savage’s Sure-Thing Principle

Authors: Taiki Takahashi

Recent advances in behavioral economics and quantum cognition and decision elucidated a number of deviations of actual human decisions and choices from mathematical principles of normative decision theory, which are referred to as "anomalies". One of the prominent anomalies is that the violations of Savage’s sure-thing principle, which is the fundamental axiom of the rational theory of decision under uncertainty. It states that if prospect x is preferred to y knowing that Event A occurred, and if x is preferred to y knowing that A did not occur, then x should be preferred to y even when it is not known whether A occurred. I explicitly derive an equality for testing the violations of Savage’s principle in behavioral experiments on decision under uncertainty. Future applications for behavioral and neuroeconomics and quantum cognition and decision theory are discussed.

Comments: 10 Pages.

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[v1] 2025-10-21 20:42:19

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