Abstract
Expected utility theory deals with choosing among acts where the decision-maker does not know for sure which consequence will result from a chosen act. When faced with several acts, the decision-maker will choose the one with the highest ‘expected utility’, where the expected utility of an act is the sum of the products of probability and utility over all possible consequences.
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Schmeidler, D., Wakker, P. (2018). Expected Utility and Mathematical Expectation. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_493
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DOI: https://doi.org/10.1057/978-1-349-95189-5_493
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