. Beginning with a brief review of the developments in the Expected Utility Theory (EUT) and its applicability in equity pricing …The concept of utility is the core component of many foundational theories in social sciences. It has evolved from a … philosophical belief that people seek happiness and satisfaction to a mathematically derived theory in economics and finance …

This note shows that the Generalized Expected Discounted Utility (GEDU) model is not dynamically consistent and does … not allow for a complete separation of the parameters characterizing risk aversion and the elasticity of intertemporal … substitution (EIS). Therefore, the model is not convenient for the effort of separating the EIS from risk aversion, which can be …