Preference Paradox and Nonlinear Expected Utility Theory

Kazuhisa Takemura
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Kazuhisa Takemura: Waseda University

Chapter Chapter 7 in Behavioral Decision Theory, 2014, pp 77-88 from Springer

Abstract: Abstract The previous chapter explained that expected utility theory included counterexamples called the Allais paradox (Allais 1953) and the Ellsberg paradox (Ellsberg 1961). The Allais and Ellsberg paradoxes are interpreted as deviations from the independence axiom. This chapter first explains the relations between these paradoxes and the independence axiom.

Keywords: Subjective Probability; Utility Theory; Prospect Theory; Expect Utility Theory; Mental Operation (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-4-431-54580-4_7

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DOI: 10.1007/978-4-431-54580-4_7

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