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On the Interplay of Riskless and Risky Utility

  • R. Duncan Luce

Abstract

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.

Keywords

Reference Level Utility Theory Prospect Theory Descriptive Theory Certainty Equivalent 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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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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