February 27, 2023

Symmetry of Value

Zachary Goodsell, University of Southern California (USC)

Abstract: Expected utility theory problematically falls silent on the comparison of some prospects whose possible payoffs have unbounded utility. However, natural ways to extend expected utility theory can quickly lead to inconsistency. This talk considers the effect of the affine invariance principle, which says that an affine transformation of the utility of outcomes preserves the ordering of prospects. The affine invariance principle is shown to have surprising consequences in contexts where utility is unbounded, but is also shown to be consistent with some natural extensions of expected utility theory to settings with unbounded utility. Some philosophical motivations for accepting the affine invariance principle are also considered.