Expected utility, independence, and continuity

Abstract

In this paper, we provide two novel expected utility theorems by suitably adjusting the independence and continuity axioms. Our first theorem characterizes expected utility preferences using weak versions of the independence axiom (with varying mixture weights) and a new weak continuity axiom. Our second theorem characterizes these preferences using weaker versions of the independence axiom (with mixture weights fixed at 1/2) and a strong topological continuity axiom. We provide useful examples to illustrate the tightness of these characterizations.