How Valuable are Chances?
Stefánsson, H. Orri , Richard Bradley
Chance Neutrality is the thesis that, conditional on some proposition being true (or being false), its chance of being true should be a matter of practical indifference. The aim of this article is to examine whether Chance Neutrality is a requirement of rationality. We prove that given Chance Neutrality, the Principal Principle entails a thesis called Linearity; the centerpiece of von Neumann and Morgenstern’s expected utility theory. With this in mind, we argue that the Principal Principle is a requirement of practical rationality but that Linearity is not and, hence, that Chance Neutrality is not rationally required.