IDEAS home Printed from https://ideas.repec.org/a/kap/jrisku/v3y1990i2p115-34.html
   My bibliography  Save this article

An Experimental Evaluation of the Descriptive Validity of Lottery-Dependent Utility Theory

Author

Listed:
  • Daniels, Richard L
  • Keller, L Robin

Abstract

This article compares the performance of the expected utility (EU) and lottery-dependent expected utility (LDEU) models in predicting the actual choices of experimental subjects among risky options. In the process, we present two approaches for calibrating the LDEU model for an individual decisionmaker. The results indicate that while LDEU exhibits a higher potential for correctly predicting choice, the version of the model calibrated by indifference judgments does not outperform EU. We suggest a functional form for the parametric functions that defines the LDEU model, and discuss ways in which this function can be incorporated into choice-based assessment approaches to improve predictions. Copyright 1990 by Kluwer Academic Publishers

Suggested Citation

  • Daniels, Richard L & Keller, L Robin, 1990. "An Experimental Evaluation of the Descriptive Validity of Lottery-Dependent Utility Theory," Journal of Risk and Uncertainty, Springer, vol. 3(2), pages 115-134, June.
    • Handle: RePEc:kap:jrisku:v:3:y:1990:i:2:p:115-34
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mehrez, Abraham, 1997. "The interface between OR/MS and decision theory," European Journal of Operational Research, Elsevier, vol. 99(1), pages 38-47, May.
    2. Daniel Cavagnaro & Mark Pitt & Richard Gonzalez & Jay Myung, 2013. "Discriminating among probability weighting functions using adaptive design optimization," Journal of Risk and Uncertainty, Springer, vol. 47(3), pages 255-289, December.
    3. Syngjoo Choi & Raymond Fisman & Douglas Gale & Shachar Kariv, 2007. "Consistency and Heterogeneity of Individual Behavior under Uncertainty," American Economic Review, American Economic Association, vol. 97(5), pages 1921-1938, December.
    4. Syngjoo Choi & Raymond Fisman & Douglas Gale & Shachar Kariv, 2007. "Substantive and Procedural Rationality in Decisions under Uncertainty," Levine's Bibliography 122247000000000946, UCLA Department of Economics.
    5. Cheng-Min Feng & Chao-Chung Kang & Haider Ali Khan, 2002. "On Modelling Negotiations within a Dynamic Multi-objective Programming Framework: Analysis of Risk Measurement with an Application to Large BOT Projects," CIRJE F-Series CIRJE-F-161, CIRJE, Faculty of Economics, University of Tokyo.
    6. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: An Annotated Bibliography," Working Papers 1110, College of the Holy Cross, Department of Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jrisku:v:3:y:1990:i:2:p:115-34. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.