The utility of gambling reconsidered

Journal of Risk and Uncertainty

Volumn 29, Issue 3, 2004, Pages 241-259

  Diecidue, Enrico ^a   Schmidt, Ulrich ^b   Wakker, Peter P ^c  

^a INSEAD   (France)

^b LEIBNIZ UNIVERSITY HANNOVER   (Germany)

^c UNIVERSITY OF AMSTERDAM   (Netherlands)

Author keywords

Certainty effect; Nonexpected utility; Risk aversion; Utility of gambling

Indexed keywords

EID: 23944466339     PISSN: 08955646     EISSN: None     Source Type: Journal    
DOI: 10.1023/B:RISK.0000046145.25793.37     Document Type: Article

References (56)

1. Bateman, Tan J., Alistair Munro, Bruce Rhodes, Chris Starmer, and Robert Sugden. (1997). "A Test of the Theory of Reference-Dependent Preferences," The Quarterly Journal of Economics 112, 647-661.
2. Birnbaum, Michael H. and Juan B. Navarrete. (1998). "Testing Descriptive Utility Theories: Violations of Stochastic Dominance and Cumulative Independence," Journal of Risk and Uncertainty 17, 49-78.
3. Bleichrodt, Han and José Luis Pinto. (2002). "A New Type of Preference Reversal," iMTA, Erasmus University, Rotterdam, The Netherlands.
4. Bleichrodt, Han and Ulrich Schmidt. (2002). "A Context-Dependent Model of the Gambling Effect," Management Science 48, 802-812.
5. Bombardier, Claire, A. D. Wolfson, A. J. Sinclair, and A. McGreer. (1982). "Comparison of Three Preference Measurement Methodologies in the Evaluation of a Functional Status Index." In Raisa B. Deber and G. Thompson (eds.), Choices in Health Care: Decision Making and Evaluation of Effectiveness, University of Toronto.
6. Burks, Arthur W. (1977). Chance, Cause, Reason (An Inquiry into the Nature of Scientific Evidence). Chicago: The University of Chicago Press.
7. Conlisk, John. (1989). "Three Variants on the Allais Example," American Economic Review 79, 392-407.
8. Conlisk, John. (1993). "The Utility of Gambling," Journal of Risk and Uncertainty 6, 255-275.
9. Davidson, Donald and Patrick Suppes. (1956). "A Finitistic Axiomatization of Utility and Subjective Probability," Econometrica 24, 264-275.
10. Davidson, Donald, Patrick Suppes, and Sidney Siegel. (1957). "Decision Making: An Experimental Approach." Stanford University Press, Stanford;
11. Chapter 2 reprinted in Ward Edwards and Amos Tversky, (eds.) (1967), Decision Making, Penuin, Harmondsworth, pp. 170-207.
12. Dyer, James S. and Rakesh K. Sarin. (1982). "Relative Risk Aversion," Management Science 28, 875-886.
13. Edwards, Ward. (1962). "Subjective Probabilities Inferred from Decisions," Psychological Review 69, 109-135.
14. Ellsberg, Daniel. (1954). "Classic and Current Notions of 'Measurable Utility'," Economic Journal 62, 528-556.
15. Fiorillo, Christopher D., Philippe N. Tobler, and Wolfram Schultz. (2003). "Discrete Coding of Reward Probability and Uncertainty by Dopamine Neurons," Science 299, 1898-1902.
16. Fishburn, Peter C. (1970). Utility Theory for Decision Making. New York: Wiley.
17. Fishburn, Peter C. (1980). "A Simple Model for the Utility of Gambling," Psychometrika 45, 435-448.
18. Friedman, Milton and Leonard J. Savage. (1948). "The Utility Analysis of Choices Involving Risk," Journal of Political Economy 56, 279-304.
19. Gafni, Amiram and Stephen Birch. (1997). "QALYs and HYEs; Spotting the Differences," Journal of Health Economics 16, 601-608.
20. Gafni, Amiram and George W. Torrance. (1984). "Risk Attitude and Time Preference in Health," Management Science 30, 440-451.
21. Golec, Joseph and Maurry Tamarkin. (1998). "Bettors Love Skewness, Not Risk, at the Horse Track," Journal of Political Economy 106, 205-225.
22. Hammond, Peter J. (1988). "Consequentialist Foundations for Expected Utility," Theory and Decision 25, 25-78.
23. Harless, David W. and Colin F. Camerer. (1994). "The Predictive Utility of Generalized Expected Utility Theories," Econometrica 61, 1251-1289.
24. Harsanyi, John C. (1978). "Bayesian Decision Theory and Utilitarian Ethics," American Economic Review, Papers and Proceedings 68, 223-228.
25. Humphrey, Stephen J. (1998). "More Mixed Results on Boundary Effects," Economics Letters 61, 79-84.
26. Johannesson, Magnus, Joseph S. Pliskin, and Milton C. Weinstein. (1993). "Are Healthy-Years Equivalents an Improvement over Quality-Adjusted Life Years?" Medical Decision Making 13, 281-286.
27. Kahneman, Daniel and Amos Tversky. (1979). "Prospect Theory: An Analysis of Decision under Risk," Econometrica 47, 263-291.
28. Karni, Edi. (1987). "Generalized Expected Utility Analysis of Risk Aversion with State-Dependent Preferences," International Economic Review 28, 229-240.
29. Le Menestrel, Marc. (2001). "A Process Approach to the Utility of Gambling," Theory and Decision 50, 249-262.
30. Lenert Leslie A., S. Morss, Mary K. Goldstein, M. R. Bergen, W. O. Faustman, and Alan M. Garber. (1997). "Measurement of the Validity of Utility Elicitations Performed By Computerized Interview," Medical Care 35, 915-920.
31. Lichtenstein, Sarah and Paul Slovic. (1971). "Reversals of Preference between Bids and Choices in Gambling Decisions," Journal of Experimental Psychology 89, 46-55.
32. Lindman, Harold R. (1971). "Inconsistent Preferences among Gambles," Journal of Experimental Psychology 89, 390-397.
33. Loomes, Graham. (1993). "Disparaties between Health State Measures: An Explanation and Some Implications." In Bill Gerrard (ed.), The Economics of Rationality, London: Routledge, pp. 149-178, (Chapter 9).
34. Loomes, Graham and Robert Sugden. (1982). "Regret Theory: An Alternative Theory of Rational Choice under Uncertainty," Economic Journal 92, 805-824.
35. Luce, R. Duncan. (2000). Utility of Gains and Losses: Measurement-Theoretical and Experimental Approaches. London: Lawrence Erlbaum Publishers.
36. Luce, R. Duncan and Anthony A. J. Marley. (2000). "On Elements of Chance," Theory and Decision 49, 97-126.
37. Markowitz, Harry M. ( 1952). "The Utility of Wealth," Journal of Political Economy 60, 151-158.
38. Marshall, Alfred. (1890). Principles of Economics. 8th edition 1920 (9th edition 1961), New York: MacMillan.
39. McCord, Mark R. and Richard de Neufville. (1986). 'Lottery Equivalents': Reduction of the Certainty Effect Problem in Utility Assessment," Management Science 32, 56-60.
40. Mehrez, Abraham and Amiram Gafni. (1989). "Quality-Adjusted Life-Years, Utility Theory and Healthy Years Equivalents," Medical Decision Making 9, 142-149.
41. Miyamoto, John M. and Stephen A. Eraker. (1988). "A Multiplicative Model of the Utility of Survival Duration and Health Quality," Journal of Experimental Psychology: General 117, 3-20.
42. Mosteller, Frederick and Philip Nogee. (1951). "An Experimental Measurement of Utility," Journal of Political Economy 59, 371-404.
43. Neilson, William S. (1992). "Some Mixed Results on Boundary Effects," Economics Letters 39, 275-278.
44. Officer, Robert R. and Alfred N. Halter. (1968). "Utility Analysis in a Practical Setting," American Journal of Agricultural Economics 50, 257-277.
45. Pope, Robin E. (1995). "Towards a More Precise Decision Framework; A Separation of the Negative Utility of Chance from Diminishing Marginal Utility and the Preference for Safety," Theory and Decision 39, 241-265.
46. Quiggin, John. (1982). "A Theory of Anticipated Utility," Journal of Economic Behaviour and Organization 3, 323-343.
47. Richardson, Jeff. (1994). "Cost Utility Analysis: What Should Be Measured?" Social Science and Medicine 39, 7-20.
48. Royden, Halsey L., Patrick Suppes, and Karol Walsh. (1959). "A Model for the Experimental Measurement of the Utility of Gambling," Behavioral Science 4, 11-18.
49. Savage, Leonard J. (1954). The Foundations of Statistics. New York: Wiley, (Second edition 1972, New York: Dover.)
50. Schlee, Edward E. (1992). "Marshall, Jevons, and the Development of the Expected Utility Hypothesis," History of Political Economy 24, 729-744.
51. Schmidt, Ulrich. (1998). "A Measurement of the Certainty Effect," Journal of Mathematical Psychology 42, 32-47.
52. Sopher, Barry and Gary Gigliotti. (1993). "A Test of Generalized Expected Utility Theory," Theory and Decision 35, 75-106.
53. Starmer, Chris. (1999). "Cycling with Rules of Thumb: An Experimental Test for a New Form of Non-Transitive Behavior," Theory and Decision 46, 141-158.
54. Starmer, Chris. (2000). "Developments in Non-Expected Utility Theory: The Hunt for a Descriptive Theory of Choice under Risk," Journal of Economic Literature 38, 332-382.
55. Starmer, Chris and Robert Sugden. (1993). "Testing for Juxtaposition and Event-Splitting Effects," Journal of Risk and Uncertainty 6, 235-254.
56. Stiggelbout, Anne M., Gwendoline M. Kiebert, Job Kievit, Jan-Willem H. Leer, G. Stoter, and Hanneke C. J. M. de Haes. (1994). "Utility Assesment In Cancer Patients: Adjustment of Time Tradeoff Scores for the Utility of Life Years and Comparison with Standard Gamble Scores," Medical Decision Making 14, 82-90.