On the Interplay of Riskless and Risky Utility

  • R. Duncan Luce


In developing this paper, I re-read some of Ward Edwards major contributions to the study of behavioral decision making (Edwards, 1954, 1962, 1992; von Winterfeldt and Edwards, 1986) to remind myself about how he has viewed the developments of a half century of work on individual decision making that began with von Neuman and Morgenstern’s (1947) theory of expected utility. I focused on three aspects:
  • The relation between normative, prescriptive, and descriptive theories.

  • The importance (or perhaps not) of some concept of reference level and the resulting concepts of gains and losses.

  • The relation of riskless and risky choice1.


Reference Level Utility Theory Prospect Theory Descriptive Theory Certainty Equivalent 
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Copyright information

© Springer Science+Business Media New York 1999

Authors and Affiliations

  • R. Duncan Luce
    • 1
  1. 1.University of CaliforniaIrvineUSA

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