Search Results - subject:"expected utility theory"

Blavatskyy, Pavlo R. - Institut für Volkswirtschaftslehre, … - 2006

highest possible outcome for certain. This stochastic decision theory explains many well-known violations of expected utility … theory such as the fourfold pattern of risk attitudes, the discrepancy between certainty equivalent and probability …

Persistent link: https://www.econbiz.de/10005627956

Hang ’em with probability zero: Why does it not work?

Dhami, Sanjit; al-Nowaihi, Ali - Department of Economics, Leicester University - 2006

does not hold, in line with the evidence. Keywords: Behavioral economics; Illegal activity; Expected utility theory; Rank … Morgenstern (1944), expected utility theory (EU) has become the main tool for studying individual decision making in economics … get rank dependent expected utility theory (RDU), which is a less radical departure from EU than CP, see Quiggin (1993). 1 …

Persistent link: https://www.econbiz.de/10005230665

An Alternative to Prospect Theory

Zou, Liang - In: Annals of Economics and Finance 7 (2006) 1, pp. 1-28

This paper presents a new approach to decision-making under risk. Preference over risky prospects is defined as a triadic reference-dependent relation in a sense similar to Sugden (2003). Characterized by a set of von Neumann-Morgenstern-style axioms, a new reference-dependent representation...

Persistent link: https://www.econbiz.de/10009228659

The law of demand versus diminishing marginal utility

Bettie, Bruce R.; Lafrance, Jeffrey T. - Department of Agricultural and Resource Economics, … - 2006

Diminishing marginal utility (DMU) is neither necessary nor sufficient for downward-sloping demand. Yet, upper-division undergraduate and beginning graduate students often presumeotherwise. This paper provides two simple counter-examples that can be used to help students understand that the Law...

Persistent link: https://www.econbiz.de/10010676632

Zpochybnění deskriptivnosti teorie očekávaného užitku / Expected utility theory reconsidered [available in Czech only]

Skořepa, Michal - Institut ekonomických studií, Univerzita Karlova v Praze - 2006

the basics of expected utility theory, the key pieces of evidence are described which showed that under certain …

Persistent link: https://www.econbiz.de/10005673608

What Simon says

Heukelom, Floris - 2006

This paper provides an overview of the work of Herbert Simon and his ideas about rational decision making. By his own standards, Simon is an economist who works in the tradition of Adam Smith and Alfred Marshall. The central theme in Simon’s research is how human beings organize themselves in...

Persistent link: https://www.econbiz.de/10011350370

Kahneman and Tversky and the origin of behavioral economics

Heukelom, Floris - 2006 - Version September 2006

expected utility theory (EUT). Bernoulli’s work is taken up by psychophysics which in turn plays an important role in the …

Persistent link: https://www.econbiz.de/10011350372

On the Mixed Extension of a Strategic Game1

Haller, Hans - In: Studies in Microeconomics 1 (2013) 2, pp. 163-172

The mixed extension of a strategic game is said to exist if each joint mixed strategy yields a well-defined and finite expected payoff for every player. With finitely many players, a mixed extension exists if and only if all payoff functions are bounded. In contrast, the mixed extension exists...

Persistent link: https://www.econbiz.de/10010781200

An expected utility maximizer walks into a bar...

Burghart, Daniel; Glimcher, Paul; Lazzaro, Stephanie - In: Journal of Risk and Uncertainty 46 (2013) 3, pp. 215-246

We conducted field experiments at a bar to test whether blood alcohol concentration (BAC) correlates with violations of the generalized axiom of revealed preference (GARP) and the independence axiom. We found that individuals with BACs well above the legal limit for driving adhere to GARP and...

Persistent link: https://www.econbiz.de/10010863428

The arguments of utility: Preference reversals in expected utility of income models

Lindsay, Luke - In: Journal of Risk and Uncertainty 46 (2013) 2, pp. 175-189

There is a debate in the literature about the arguments of utility in expected utility theory. Some implicitly assume …

Persistent link: https://www.econbiz.de/10010863429