Jump to ContentJump to Main Navigation
Measuring UtilityFrom the Marginal Revolution to Behavioral Economics$
Users without a subscription are not able to see the full content.

Ivan Moscati

Print publication date: 2018

Print ISBN-13: 9780199372768

Published to Oxford Scholarship Online: December 2018

DOI: 10.1093/oso/9780199372768.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (www.oxfordscholarship.com). (c) Copyright Oxford University Press, 2019. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 15 December 2019

Measuring Utility, Destabilizing EUT

Measuring Utility, Destabilizing EUT

Behavioral Economics Begins, 1965–1985

Chapter:
(p.261) chapter 16 Measuring Utility, Destabilizing EUT
Source:
Measuring Utility
Author(s):

Ivan Moscati

Publisher:
Oxford University Press
DOI:10.1093/oso/9780199372768.003.0017

Chapter 16 shows how the validity of expected utility theory (EUT) was increasingly called into question between the mid-1960s and the mid-1970s and discusses how a series of experiments performed from 1974 to 1985 undermined the earlier confidence that EUT makes it possible to measure utility. Beginning in the mid-1960s, in a series of experiments seminal to the field later called behavioral economics, Sarah Lichtenstein, Paul Slovic, Amos Tversky, and others showed that decision patterns violating EUT are systematic. The new experimenters who engaged with the EUT-based measurement of utility from the mid-1970s, namely Uday Karmarkar, Richard de Neufville, Paul Schoemaker, and coauthors, showed that different elicitation methods to measure utility, which according to EUT should produce the same outcome, generate different measures. These findings contributed to destabilizing EUT, undermined the confidence in EUT-based utility measurement, and helped foster a blossoming of novel behavioral models of decision-making under risk.

Keywords:   Allais paradox, Ellsberg paradox, Michigan School, certainty equivalence method, probability equivalence method, Uday Karmarkar, probability distortion, Richard de Neufville, Paul Schoemaker, nonexpected utility models

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .