Abstract
First expressed by Allais in the early fifties, dissatisfaction with the expected utility model of individual risk taking behavior has mushroomed in recent years, as the number of papers in this volume, its predecessor (Allais & Hagen(1979)), and elsewhere2 indicates. The nature of the current debate, i.e. whether to reject a theoretically elegant and heretofore tremendously useful descriptive model in light of accumulating evidence against its underlying assumptions, is a classic one in science, and the spur to new theoretical and empirical research which it is offering cannot help but leave economists, psychologists, and others who study this area with a better understanding of individual behavior toward risk.
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References
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Machina, M.J. (1983). Generalized Expected Utility Analysis and the Nature of Observed Violations of the Independence Axiom. In: Stigum, B.P., Wenstøp, F. (eds) Foundations of Utility and Risk Theory with Applications. Theory and Decision Library, vol 37. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-1590-4_15
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DOI: https://doi.org/10.1007/978-94-017-1590-4_15
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