# Category: Expected utility

Expected value of including uncertainty
In decision theory and quantitative policy analysis, the expected value of including uncertainty (EVIU) is the expected difference in the value of a decision based on a probabilistic analysis versus a
Multi-attribute utility
In decision theory, a multi-attribute utility function is used to represent the preferences of an agent over bundles of goods either under conditions of certainty about the results of any potential ch
Nonlinear expectation
In probability theory, a nonlinear expectation is a nonlinear generalization of the expectation. Nonlinear expectations are useful in utility theory as they more closely match human behavior than trad
Pascal's mugging
In philosophy, Pascal's mugging is a thought-experiment demonstrating a problem in expected utility maximization. A rational agent should choose actions whose outcomes, when weighed by their probabili
Hyperbolic absolute risk aversion
In finance, economics, and decision theory, hyperbolic absolute risk aversion (HARA) refers to a type of risk aversion that is particularly convenient to model mathematically and to obtain empirical p
Choquet integral
A Choquet integral is a subadditive or superadditive integral created by the French mathematician Gustave Choquet in 1953. It was initially used in statistical mechanics and potential theory, but foun
Expected utility hypothesis
The expected utility hypothesis is a popular concept in economics that serves as a reference guide for decisions when the payoff is uncertain. The theory recommends which option rational individuals s
Expected value of sample information
In decision theory, the expected value of sample information (EVSI) is the expected increase in utility that a decision-maker could obtain from gaining access to a sample of additional observations be
Generalized expected utility
Generalized expected utility is a decision-making metric based on any of a variety of theories that attempt to resolve some discrepancies between expected utility theory and empirical observations, co
Subjective expected utility
In decision theory, subjective expected utility is the attractiveness of an economic opportunity as perceived by a decision-maker in the presence of risk. Characterizing the behavior of decision-maker
Two-moment decision model
In decision theory, economics, and finance, a two-moment decision model is a model that describes or prescribes the process of making decisions in a context in which the decision-maker is faced with r
Action axiom
An action axiom is an axiom that embodies a criterion for describing action. Action axioms are of the form "If a condition holds, then the following will be done".
Lottery (probability)
In expected utility theory, a lottery is a discrete distribution of probability on a set of states of nature. The elements of a lottery correspond to the probabilities that each of the states of natur
Ambiguity aversion
In decision theory and economics, ambiguity aversion (also known as uncertainty aversion) is a preference for known risks over unknown risks. An ambiguity-averse individual would rather choose an alte