TITLE

Is “Generic Utility Theory” a Suitable Theory of Choice Behavior for Gambles with Mixed Gains and Losses?

AUTHOR(S)
Chechile, Richard A.; Butler, Susan F.
PUB. DATE
March 2000
SOURCE
Journal of Risk & Uncertainty;Mar2000, Vol. 20 Issue 2, p189
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Miyamoto's (1988, 1992) generic utility theory (GUT) subsumes a broad class of bilinear utility models. Chechile and Cooke (1997) tested the GUT class of models and found model failure due to the systematic variation of a parameter that should be a positive constant across a range of contexts. In the current study, an improved experimental design is employed to evaluate utility theory. The current study provides further evidence against the GUT class of models for mixed gambles. Moreover, evidence is also provided to demonstrate individual behavior that is incompatible with a coherent bilinear utility theory of choice behavior in the context of mixed gambles with gains and losses.
ACCESSION #
9804859

 

Related Articles

  • Knock-Out for Descriptive Utility or Experimental-Design Error? Traub, Stefan; Seidl, Christian; Schmidt, Ulrich; Grösche, Peter // Journal of Economics;1999, Vol. 70 Issue 2, p109 

    Using an experimental design of stating equivalent probabilities for 252 stimulus lottery pairs, Chechile and Cooke (1997) alleged to have refuted generic-utility theory which itself comprises many modern utility theories. The present paper systematically investigates the feasibility of the...

  • A remark on a utility representation theorem of Rader. Mehta, Ghanshyam B. // Economic Theory;1997, Vol. 9 Issue 2, p367 

    In this note we consider some problems involved in proving the existence of a continuous real-valued utility function representing a preference relation. We claim that there is an error in the classical Rader proof of the existence of an upper semicontinuous utility function. We also pose some...

  • A revealed-preference implication of weighted utility decisions under uncertainty. Park, In-Uck // Economic Theory;1998, Vol. 11 Issue 2, p413 

    Summary. In a novel formulation of revealed preference analysis, Green and Osband [8] show that for expected-utility maximizers, acts partition the state-simplex into linear polyhedral blocks. The question naturally arises whether this characterization distinguishes expected utility theory from...

  • Analytical structure of discrete choice models. Sonis, Michael // Annals of Regional Science;Nov92, Vol. 26 Issue 4, p349 

    In this paper a new conceptual framework of the external interventions of the active socio-economic and territorial environment in the content of the choice between the set of competitive alternatives is considered. This conceptual framework generates a new analytical procedure for the...

  • Data Envelopment Analysis with Reverse Inputs and Outputs. Lewis, Herbert F.; Sexton, Thomas R. // Journal of Productivity Analysis;Mar2004, Vol. 21 Issue 2, p113 

    Data envelopment analysis (DEA) assumes that inputs and outputs are measured on scales in which larger numerical values correspond to greater consumption of inputs and greater production of outputs. We present a class of DEA problems in which one or more of the inputs or outputs are naturally...

  • A Switching Regression Model with Different Change-Points for Individual Coefficients and its Application to the Energy Demand Equations for Japan. Toyoda, T.; Ohtani, K. // Empirical Economics;1989, Vol. 14 Issue 2, p93 

    In this paper, we set up a switching regression model in which individual coefficients are allowed to shift at different change-points. We also apply it to the energy demand equations and examine structural change in the demands for total fuel oil and for light oil and kerosene at the second oil...

  • FRIEDMAN-SAVAGE UTILITY FUNCTIONS CONSISTENT WITH RISK AVERSION. Hakansson, Nils H. // Quarterly Journal of Economics;Aug70, Vol. 84 Issue 3, p472 

    This article discusses the importance of two concave segments separated by a convex segment to individual's utility of wealth function. The coexistence of gambling and insurance was found to be due to overstatement of low probabilities and understatement of high probabilities. The utility...

  • Path independent choice and the ranking of opportunity sets. Ryan, Matthew // Social Choice & Welfare;Jan2014, Vol. 42 Issue 1, p193 

    The indirect utility principle provides an instrumentalist basis for ranking opportunity sets, given an underlying preference ranking on alternatives. Opportunity set A is weakly preferred to B if A includes at least one preference-maximising element from $$A\cup B$$. We introduce the Plott...

  • An Application of a Decision-Theoretic Model to a Quota-Free Selection Problem. Ben-Shakhar, Gershon; Belier, Michal // Journal of Applied Psychology;Feb83, Vol. 68 Issue 1, p137 

    The present study demonstrates a possible application of a threshold utility model for evaluating the student selection procedure in the Faculty of Humanities at the Hebrew University of Jerusalem, Jerusalem, Israel. An index of usefulness of the predictor is defined in terms of its contribution...

Share

Read the Article

Courtesy of THE LIBRARY OF VIRGINIA

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics