The Allais Paradox illustrates how human decisions often deviate from expected utility theory, sparking alternative models in behavioral economics and decision theory.
Anomalies are economic choices that cannot be explained by standard choice theory based on the axioms of preference. The identification of anomalies has led to the development of behavioural economics and the rejection of expected utility theory.
A comprehensive exploration of Expected Utility Theory, a fundamental concept in economics, finance, and decision theory, modeling decision-making under uncertainty by considering the expected outcomes of different choices.
