ON CERTAINTY EFFECT IN EXPECTED UTILITY THEORY

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  • Tabata Yoshio
    Department of Applied Physics, Faculty of Engineering, Osaka University

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  • 期待効用理論における確実性効果について

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A phenomenon of certainty effect is well known as a typical paradox in expected utility theory and is often observed in the laboratory gambling to test the axiomatic system of utility theory. A necessary and sufficient condition that the certainty effect is observed is demonstrated by means of a generalized utility function and some properties of individual's behavior derived from the condition are discussed.

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