 Von Neumann–Morgenstern utility theorem

The Von Neumann–Morgenstern utility theorem is a fundamental concept in decision theory and economics, particularly in the context of expected utility theory. It provides a framework for individuals to make rational choices under uncertainty. ### Key Elements of the Theorem: 1. **Rational Preferences**: The theorem assumes that individuals have preferences over risky prospects (lotteries) that can be represented in a consistent manner.