An expected utility based cost-benefit analysis is in general fragile to its distributional assumptions. We derive … necessary and sufficient conditions on the utility function of the expected utility model to avoid this. The conditions ensure … that expected (marginal) utility remains finite also under heavy-tailed distributional assumptions. Our results are context …

deviation (in beliefs, utility, or perceived prices) is within e of expected utility theory. The number e can then be used as a …We propose a new measure of deviations from expected utility, given data on economic choices under risk and uncertainty … distance to the theory. We apply our methodology to three recent large-scale experiments. Many subjects in those experiments …