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- Title
Unexpected Utility Paradoxes.
- Authors
Baryshnikov, Yuliy
- Abstract
This article provides an overview of utility functions and expected utility theory in economic decision-making. It discusses the history of expected utility theory, including the St. Petersburg paradox and the development of prospect theory as an alternative. The article also explores the concept of utility saturation and its impact on risk aversion. It introduces the use of Markov chains to analyze decision-making and concludes by acknowledging the limitations of models in understanding expected utility theory.
- Subjects
PARADOX; UTILITY functions; LAURENT series; RANDOM walks; UTILITY theory; EXPECTED utility; GAME theory
- Publication
Mathematical Intelligencer, 2024, Vol 46, Issue 2, p164
- ISSN
0343-6993
- Publication type
Article
- DOI
10.1007/s00283-024-10354-1