Expected Utility Theory

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August 31, 2024 5 min read Definitions
Allais Paradox: Understanding Human Decision-Making Under Uncertainty
Behavioral Economics Decision Theory Allais Paradox Expected Utility Theory Behavioral Economics Decision Making Prospect Theory
The Allais Paradox illustrates how human decisions often deviate from expected utility theory, sparking alternative models in behavioral economics and decision theory.
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August 31, 2024 4 min read Definitions
Anomalies: Economic Choices Defying Standard Theory
Economics Behavioral Economics Anomalies Economic Choices Behavioral Economics Expected Utility Theory Prospect 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.
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August 31, 2024 4 min read Definitions
Expected Utility Theory: Decision-Making under Uncertainty
Economics Finance Decision Theory Expected Utility Theory Decision Making Uncertainty Economics Finance
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.
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