Atemporal dynamic consistency and expected utility theory
Abstract In this paper we represent atemporal sequential decisions as compound lotteries. We show that a preference relation defined on the set of conditional lotteries (i.e., sublotteries conditioned on the lotteries to which they belong) that satisfies consequentialism and the axiom of reduction of compound lotteries, satisfies the independence axiom of expected utility theory if and only if it satisfies dynamic consistency.