Utility Function
Published in Wiley StatsRef: Statistics Reference Online • Sep 29, 2014
NobleIDNI4P74W12R53S19
Authors:
Rakesh K. Sarin
Abstract
Abstract Expected utility is used as a criterion to rank order lotteries. Axioms for expected utility are given. Assessment and behavioral properties of utility functions are discussed. Allais paradox, which challenges expected utility, is illustrated.
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