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Nonlinear Utility Theory and Prospect Theory: Eliminating the Paradoxes of Linear Expected Utility Theory

  • Kazuhisa TakemuraEmail author
Chapter
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Abstract

As introduced inthe previous chapter, expected utility theory has counter-examples called theAllais paradox (Allais, 1953) and Ellsberg’s paradox (Ellsberg, 1961), and we know that these counter-examples are related to independence axioms.

Keywords

Nonlinear expected utility theory Non-additive probability Choquet integral Prospect theory 

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Copyright information

© Springer Nature Singapore Pte Ltd. 2019

Authors and Affiliations

  1. 1.Department of PsychologyWaseda UniversityTokyoJapan

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