The Completeness Axiom

Completeness is the first axiom of preferences necessary to use expected utility theory.

Takeaway Points

  1. A set of preferences is complete if, for all pairs of outcomes A and B, the individual prefers A to B, prefers B to A, or is indifferent between A and B.
  2. Such preferences need not be sensible. Someone who prefers dying a painful death to winning $1 million could still have a complete preference ordering.
  3. In essence, the only thing completeness rules out is a “decline to state” option.
  4. Completeness is a reasonable axiom for situations with important stakes. Someone may not be able to provide stable answers to trivial outcomes.

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