Experiments on Decisions under Risk: The Expected Utility Hypothesis

Abstract

This book reviews experimental and field studies on the expected utility (eu) model, showing that people commonly violate its axioms and fail to maximize eu in their decisions. four new studies examine preferences for information, insurance choices, the effect of statistical knowledge and context effects. they call into question the descriptive, predictive as well as prescriptive adequacy of eu theory. a plea is made for better descriptive theories, especially regarding individual differences, task and context effects.