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RePEc: Research Papers in Economics
NON-EXPECTED UTILITY THEORIES: WEIGHTED EXPECTED, RANK DEPENDENT, AND CUMULATIVE PROSPECT THEORY UTILITY
Jonathan W. Tuthill, Darren L. Frechette

Paper Summary

The article discusses problems with expected utility theory and presents three alternatives: weighted expected utility, rank dependent utility, and cumulative prospect theory. These alternatives can better explain complex risk preferences and address issues like the Allais paradox.

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