Expected Utility Theory

Some articles on expected utility theory, utility, theory, expected:

Preference (economics) - Expected Utility Theory
... applied to a space of simple lotteries, as in expected utility theory ... In this case a preference structure over lotteries can also be represented by a utility function ...
Behavioral Finance - History - Prospect Theory
... In 1979, Kahneman and Tversky wrote Prospect theory An Analysis of Decision Under Risk, an important paper that used cognitive psychology to explain various divergences of economic decision making from neo-clas ... Prospect theory is an example of generalized expected utility theory ... Although not a conventional part of behavioral economics, generalized expected utility theory is similarly motivated by concerns about the descriptive inaccuracy of expected ...
Allais Paradox - Statement of The Problem
... (who chose 1A alone or 2B alone) would choose both 1A and 2B together is inconsistent with expected utility theory ... According to expected utility theory, the person should choose either 1A and 2A or 1B and 2B ... The inconsistency stems from the fact that in expected utility theory, equal outcomes added to each of the two choices should have no effect on the relative ...

Famous quotes containing the words theory, expected and/or utility:

    Osteopath—One who argues that all human ills are caused by the pressure of hard bone upon soft tissue. The proof of his theory is to be found in the heads of those who believe it.
    —H.L. (Henry Lewis)

    What strikes me as odd now is how much my father managed to get across to me without those heart-to-hearts which I’ve read about fathers and sons having in the study or in the rowboat or in the car.... Somehow I understood completely how he expected me to behave, in small matters as well as large, even though I can’t remember being given any lectures about it beyond the occasional, undramatic “You might as well be a mensch.”
    Calvin Trillin (20th century)

    Moral sensibilities are nowadays at such cross-purposes that to one man a morality is proved by its utility, while to another its utility refutes it.
    Friedrich Nietzsche (1844–1900)