A Note on Concave Utility Functions

Martin M Monti; Simon Grant; Daniel N Osherson

doi:10.1007/s11299-005-0006-7

A Note on Concave Utility Functions

Martin M Monti, Simon Grant, Daniel N Osherson

Research output: Contribution to journal › Article › peer-review

Abstract

The classical theory of preference among monetary bets represents people as expected utility maximizers with concave utility functions. Critics of this account often rely on assumptions about preferences over wide ranges of total wealth. We derive a prediction of the theory that bears on bets at any fixed level of wealth, and test the prediction behaviorally. Our results are discrepant with the classical account. Competing theories are also examined in light of our data.

Original language	English
Pages (from-to)	85-96
Journal	Mind and Society
Volume	4
DOIs	https://doi.org/10.1007/s11299-005-0006-7
Publication status	Published - 2005

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title = "A Note on Concave Utility Functions",

abstract = "The classical theory of preference among monetary bets represents people as expected utility maximizers with concave utility functions. Critics of this account often rely on assumptions about preferences over wide ranges of total wealth. We derive a prediction of the theory that bears on bets at any fixed level of wealth, and test the prediction behaviorally. Our results are discrepant with the classical account. Competing theories are also examined in light of our data.",

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AU - Grant, Simon

AU - Osherson, Daniel N

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AB - The classical theory of preference among monetary bets represents people as expected utility maximizers with concave utility functions. Critics of this account often rely on assumptions about preferences over wide ranges of total wealth. We derive a prediction of the theory that bears on bets at any fixed level of wealth, and test the prediction behaviorally. Our results are discrepant with the classical account. Competing theories are also examined in light of our data.

U2 - 10.1007/s11299-005-0006-7

DO - 10.1007/s11299-005-0006-7

M3 - Article

VL - 4

SP - 85

EP - 96

JO - Mind and Society

JF - Mind and Society

ER -

A Note on Concave Utility Functions

Abstract

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