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Utility Representation Theorem

Game Theory

A utility representation theorem in economics shows that, under certain conditions on a preference ordering, that ordering can be represented by a real-valued utility function, so that one option is preferred to another exactly when its utility number is larger. This lets a decision-maker's entire preference structure be captured by a single function rather than a full list of pairwise comparisons, though not every preference relation admits such a representation. The best-known instance is the Von Neumann-Morgenstern utility theorem, which shows that a rational agent's preferences over lotteries can always be represented by a utility function of this kind.

Facts
Statement
Under certain conditions, a preference ordering can be represented by a real-valued utility function, such that option A is preferred to option B if and only if the utility of A is larger than that of B. 1
Classification
Statement Form
Existence Theorem 1
Statement Form
Characterization Theorem 1
Connections

Has Statement Form

Sources
1. Utility representation theorem - Wikipedia
  • Introduction, sentence 1
    under certain conditions, a preference ordering can be represented by a real-valued utility function
  • In Group: Decision Theory and Utility, Lead paragraph
    In economics, a utility representation theorem shows that, under certain conditions, a preference ordering can be represented by a real-valued utility function, such that option A is preferred to option B if and only if the utility of A is larger than that of B.
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