David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Ezio Di Nucci
Jack Alan Reynolds
Learn more about PhilPapers
Theory and Decision 50 (1):35-58 (2001)
In order to accommodate empirically observed violations of the independence axiom of expected utility theory Becker and Sarin (1987) proposed their model of lottery dependent utility in which the utility of an outcome may depend on the lottery being evaluated. Although this dependence is intuitively very appealing and provides a simple functional form of the resulting decision criterion, lottery dependent utility has been nearly completely neglected in the recent literature on decision making under risk. The goal of this paper is to revive the lottery dependent utility model. Therefore, we derive first a sound axiomatic foundation of lottery dependent utility. Secondly, we develop a discontinuous variant of the model which can accommodate boundary effects and may lead to a lexicographic non-expected utility model. Both analyses are accompanied by considering some functional specifications which are in accordance with recent experimental results and may have significant applications in business and management science
|Keywords||Lottery dependent utility Boundary effects Lexicographic utility|
|Categories||categorize this paper)|
Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
|Through your library|
References found in this work BETA
No references found.
Citations of this work BETA
Francesca Beccacece & Alessandra Cillo (2006). Applying the Benchmarking Procedure: A Decision Criterion of Choice Under Risk. [REVIEW] Theory and Decision 61 (1):75-91.
Similar books and articles
Paola Modesti (2003). Lottery-Dependent Utility Via Stochastic Benchmarking. Theory and Decision 55 (1):45-57.
Wesley Cooper (2008). Decision-Value Utilitarianism. Polish Journal of Philosophy 2 (2):39-50.
Stephen A. Clark (2000). Revealed Preference and Expected Utility. Theory and Decision 49 (2):159-174.
Paul Weirich (2010). Utility and Framing. Synthese 176 (1):83 - 103.
Marc le Menestrel (2001). A Process Approach to the Utility for Gambling. Theory and Decision 50 (3):249-262.
Michel Demers (1987). Mean Utility Preserving Increases in Risk for State Dependent Utility Functions. Theory and Decision 23 (2):113-128.
Moez Abouda & Alain Chateauneuf (2002). Positivity of Bid-Ask Spreads and Symmetrical Monotone Risk Aversion. Theory and Decision 52 (2):149-170.
Rolf Aaberge (2011). Empirical Rules of Thumb for Choice Under Uncertainty. Theory and Decision 71 (3):431-438.
John Quiggin (2001). Production Under Uncertainty and Choice Under Uncertainty in the Emergence of Generalized Expected Utility Theory. Theory and Decision 51 (2/4):125-144.
Patrick Suppes (1981). The Limits of Rationality. Grazer Philosophische Studien 12:85-101.
James M. Stearns & Shaheen Borna (1995). The Ethics of Lottery Advertising: Issues and Evidence. [REVIEW] Journal of Business Ethics 14 (1):43 - 51.
Giuseppe Attanasi & Aldo Montesano (2012). The Price for Information About Probabilities and its Relation with Risk and Ambiguity. Theory and Decision 73 (1):125-160.
Per-erik Malmnäs (1994). Axiomatic Justifications of the Utility Principle: A Formal Investigation. Synthese 99 (2):233 - 249.
George Wu (1999). Anxiety and Decision Making with Delayed Resolution of Uncertainty. Theory and Decision 46 (2):159-199.
Added to index2010-09-02
Total downloads16 ( #216,155 of 1,790,408 )
Recent downloads (6 months)8 ( #106,758 of 1,790,408 )
How can I increase my downloads?