Utility of gambling II: Entropy-modified linear weighted utility

Luce, RD; Ng, CT; Marley, AA; Aczel, J

Utility of gambling II: Entropy-modified linear weighted utility

Luce, RD Ng, CT Marley, AA Aczel, J

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Publisher:: Springer-Verlag
Publication Type:: Journal Article
Citation:: Economic Theory, 2008, 36 (2), pp. 165 - 187
Issue Date:: 2008-01

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Field	Value	Language
dc.contributor.author	Luce, RD	en_US
dc.contributor.author	Ng, CT	en_US
dc.contributor.author	Marley, AA	en_US
dc.contributor.author	Aczel, J	en_US
dc.date.issued	2008-01	en_US
dc.identifier.citation	Economic Theory, 2008, 36 (2), pp. 165 - 187	en_US
dc.identifier.issn	0938-2259	en_US
dc.identifier.uri	http://hdl.handle.net/10453/15735
dc.description.abstract	We specialize our results on entropy-modified representations of event-based gambles to representations of probability-based gambles by assuming an implicit event structure underlying the probabilities, and adding assumptions linking the qualitative properties of the former and the latter. Under segregation and under duplex decomposition, we obtain numerical representations consisting of a linear weighted utility term plus a term corresponding to information-theoretical entropies. These representations accommodate the Allais paradox and most of the data due to Birnbaum and associates. A representation of mixed event-and probability-based gambles accommodates the Ellsberg paradox. We suggest possible extensions to handle the data not accommodated.	en_US
dc.publisher	Springer-Verlag	en_US
dc.relation.ispartof	Economic Theory	en_US
dc.relation.isbasedon	10.1007/s00199-007-0259-y	en_US
dc.subject.classification	Economic Theory	en_US
dc.title	Utility of gambling II: Entropy-modified linear weighted utility	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	36	en_US
utslib.for	1401 Economic Theory	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	1403 Econometrics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Strength - CENSOC - Study of Choice
utslib.copyright.status	closed_access
pubs.consider-herdc	false	en_US
pubs.issue	2	en_US
pubs.volume	36	en_US

Abstract:

We specialize our results on entropy-modified representations of event-based gambles to representations of probability-based gambles by assuming an implicit event structure underlying the probabilities, and adding assumptions linking the qualitative properties of the former and the latter. Under segregation and under duplex decomposition, we obtain numerical representations consisting of a linear weighted utility term plus a term corresponding to information-theoretical entropies. These representations accommodate the Allais paradox and most of the data due to Birnbaum and associates. A representation of mixed event-and probability-based gambles accommodates the Ellsberg paradox. We suggest possible extensions to handle the data not accommodated.

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http://hdl.handle.net/10453/15735