Theory and Decision

, Volume 71, Issue 3, pp 431-438

First online:

Empirical rules of thumb for choice under uncertainty

  • Rolf AabergeAffiliated withResearch Department, Statistics Norway Email author 

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A substantial body of empirical evidence shows that individuals overweight extreme events and act in conflict with the expected utility theory. These findings were the primary motivation behind the development of a rank-dependent utility theory for choice under uncertainty. The purpose of this paper is to demonstrate that some simple empirical rules of thumb for choice under uncertainty are consistent with the rank-dependent utility theory.


Rank-dependent utility Maximin Maximax Mid-range

JEL Classification