The theory of expected utility maximization (EUM) proposed by Bernoulli explains risk aversion as a consequence of … diminishing marginal utility of wealth. However, observed choices between risky lotteries are difficult to reconcile with EUM: for … sufficiently favorable large gambles) to be consistent with any utility-of-wealth function. We propose a unified explanation for …

. Overwhelming evidence shows that choice is stochastic, which has given rise to random utility models as the dominant paradigm in … choices reveal preferences without assumptions on the structure of utility noise. Sharper results are obtained if the analysis … conclude by showing that standard random utility models from economics and standard drift-diffusion models from psychology …

Emotions were central to the development of economics, especially in utility theory in classical economics. While … neoclassical utility theory basically abolished emotions, behavioural economics more recently reintroduced emotions in utility … theory. Beyond utility theory, economic theorists use emotions to explain behaviour which otherwise could not be understood …

important case of independence, it is shown that the self-employed derive more utility from their work than people employed by … an organization, irrespective of income gained or hours worked. This is evidence for procedural utility: people do not …