Preferences UnderUncertainty and the Deficiencies of the Expected Utility Model

Murat Tasdemir

Anadolu University Journal of Social Sciences, 2007, vol. 7, issue 1, 307-318

Abstract: In economics, the prevailing framework to explain preferences under uncerta- inty is the Expected Utility theory. Despite its widespread use, the Expected Utility theory is not free from problems. Experimental and empirical works shows that, in real life, the choices of individuals among risky alternatives conflict with the axioms of the Expected Utility theory. This study, in the light of experimental studies, investigates the problems with the Expected Utility theory regarding the individuals’preferences under risk.

Keywords: Preferences; Uncertainty; Risk; Expected Utility; Utility Function. (search for similar items in EconPapers)
JEL-codes: D01 D11 D80 (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:and:journl:v:7:y:2007:i:1:p:307-318

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