LOTTERY DEPENDENT UTILITY: A REEXAMINATION

摘要

In order to accommodate empirically observed violations of the independence axiom of expected utility theory Becker and Sarin (1987) proposed their model of lottery dependent utility in which the utility of an outcome may depend on the lottery being evaluated. Although this dependence is intuitively very appealing and provides a simple functional form of the resulting decision criterion, lottery dependent utility has been nearly completely neglected in the recent literature on decision making under risk.