New Theory Unlocks Secrets of Consumer Decision-Making and Wealth Accumulation!
The article introduces a new theory called ratio utility theory, which combines elements from expected utility theory and prospect theory in behavioral economics. This theory helps explain how people make decisions based on their wealth and subjective probabilities. The researchers show that ratio utility theory supports the idea that marginal utility decreases as wealth increases. Through quantitative analysis, they provide evidence for the validity of this new theory.