Journal of Risk and Uncertainty

, Volume 6, Issue 3, pp 255–275 | Cite as

The utility of gambling

  • John Conlisk


A tiny utility of gambling is appended to an expected utility model for a risk-averse individual. It is shown that the model can explain small payoff gambles, large prize lotteries, and patterns of risk-seeking in the experimental evidence that are puzzling from the viewpoint of standard theory. At the same time, the model maintains expected utility theory's ability to explain insurance purchase, portfolio diversification, and other risk-averting behavior. The tiny utility of gambling could equally well be appended to models of risky choice other than the expected utility model.

Key words

gambling risk uncertainty 


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Copyright information

© Kluwer Academic Publishers 1993

Authors and Affiliations

  • John Conlisk
    • 1
  1. 1.Economics D-008, Department of EconomicsUniversity of California San DiegoLa Jolla

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