Lottery Dependent Utility: a Reexamination

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)
DOI 10.1023/A:1005219005058
 Save to my reading list
Follow the author(s)
My bibliography
Export citation
Find it on Scholar
Edit this record
Mark as duplicate
Revision history Request removal from index
Download options
PhilPapers Archive

Upload a copy of this paper     Check publisher's policy on self-archival     Papers currently archived: 24,392
External links
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.

Add more references

Citations of this work BETA

Add more citations

Similar books and articles
Wesley Cooper (2008). Decision-Value Utilitarianism. Polish Journal of Philosophy 2 (2):39-50.
Patrick Suppes (1981). The Limits of Rationality. Grazer Philosophische Studien 12:85-101.

Monthly downloads

Added to index


Total downloads

32 ( #150,077 of 1,924,709 )

Recent downloads (6 months)

16 ( #40,232 of 1,924,709 )

How can I increase my downloads?

My notes
Sign in to use this feature

Start a new thread
There  are no threads in this forum
Nothing in this forum yet.