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An Expected Utility-User's Guide to Nonexpected Utility Experiments

Author

Listed:
  • William S. Neilson

    (Texas A&M University)

Abstract

Recent experimental evidence suggests that standard expected utility is violated in a wide variety of ways: losses are treated differently from gains, people are generally risk averse over gains and risk loving over losses, fanning and curvature effects exist, problem representation matters, and preference reversals are pervasive. An effort is made to suggest how these effects will change results from models based on expected utility theory, and how researchers who use expected utility in their analysis should react to these findings.

Suggested Citation

  • William S. Neilson, 1993. "An Expected Utility-User's Guide to Nonexpected Utility Experiments," Eastern Economic Journal, Eastern Economic Association, vol. 19(3), pages 257-274, Summer.
    • Handle: RePEc:eej:eeconj:v:19:y:1993:i:3:p:257-274
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume19/V19N3P257_274.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Korenok, Oleg & Millner, Edward L. & Razzolini, Laura, 2012. "Are dictators averse to inequality?," Journal of Economic Behavior & Organization, Elsevier, vol. 82(2), pages 543-547.

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    More about this item

    Keywords

    Expected Utility Theory; Non Expected Utility; Risk Averse; Risk;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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