Utility Theories: Measurements and Applications

304 Pages·1992·21.223 MB·English

by  L. Robin Keller (auth.), Ward Edwards (eds.)

Utility Theories: Measurements
and Applications
Studies in Risk and Uncertainty
editedbyW. KipViscusi
DepartmentofEconomics
Duke University
Durham, NorthCarolina27706
Previously publishedbooksintheseries:
1. Luken, R.: ENVIRONMENTAL
REGULATION:TECHNOLOGY,
AMBIENTANDBENEFITS-BASED
APPROACHES
2. Shubik, M.: RISK, ORGANIZATIONS
AND SOCIETY
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Library 01 Congress Catafoging-in-Publication Data
Utillty theories' measurements and applicatlonSiediled by Ward
Edwards
p cm. --(StUdI8S in rlsk and uncert3lnty)
Includes bibllographlcal references and index
ISBN 978-0-7923-9227-9 ISBN 978-94-011-2952-7 (eBook)
DOI 10.1007/978-94-011-2952-7
1 Utility theory 2 Oecislon-makmg I Edwards, Ward
11 Sen es
HB201.U88 1992
6584'03-dc20 92-4915
Copynght 11" 1992 by Springer SClence+Business Media Ne'\-\' York
Originally publisbed by Kluwer Academic Publishers in 1992
Softcover reprint of thc hardcover 1st edition 1992
All rights reserved. No part of this publication may be reproduced,
stored In a retfleval system or transmitted In any form or by any means
mechanlcal, photo-copying, recordlng, or otherwise, wlthout the prior
written permission of the publlsher. Springer Science+Business Media, LLC.
Printed on acid-free paper
For
Elaine Corry
Assistant Directorfor Administration
Social Science Research Institute
University of Southern California
ElaineCorryhasbeentheAssistantDirectorfor
AdministrationoftheInstituteofwhichIam
Directorsince 1976.Everybitofscientificoutput
ofthe Instituteoverthatperiod hashermarkon
it, usuallyinwaysmuchtoosubtletobevisible
ortobeadequatelyappreciated. Bybeinga
consummatelyskilledandutterlydedicated
administratorofscience, shehasenabledallof
usinSSRItobeeffectivescientists. Thankyou,
Elaine.
Contents
Contributing Authors ix
Preface xi
Acknowledgments xv
I
Review
1
Properties ofUtilityTheoriesandRelated
EmpiricalPhenomena 3
L. Robin Keller
II
TheOldTimeReligionandItsImplementation
2
InPraise oftheOldTimeReligion 27
RonaldA. Howard
3
OntheFoundationsofPrescriptive Decision
Analysis 57
Ralph L. Keeney
4
GenericAnalysisofUtilityModels 73
JohnM. Miyamoto
III
GeneralizedUtilityIsNot Normative
5
SmallWorldsandSureThings:
ConsequentialismbytheBackDoor 109
IrvingH. LaValle
vii
VIII CONTENTS
6
WhatNow forGeneralizedUtilityTheory 137
Rakesh K. Sarin
7
TheIndependenceAxiom VersustheReduction
Axiom: MustWeHaveBoth? 165
Uzi Segal
IV
WhatShouldDescriptiveDecisionModelsLookLike?
WhatDoTheyDescribe?
8
Rational Versus Plausible Accounting
EquivalencesinPreference Judgments 187
R. Duncan Luce
9
RecentTestsofGeneralizationsofExpected
UtilityTheory 207
Colin F. Camerer
10
TowardtheDemiseofEconomicManand
Woman; BottomLinesfrom SantaCruz 253
Ward Edwards
V
Discussion
11
OldandNew RolesforExpectedand
GeneralizedUtilityTheories 271
Thomas Eppel, David Matheson,JohnMiyamoto,
GeorgeWu, andStuartEriksen
Author Index 295
Subject Index 299
Contributing Authors
Colin F. Camerer
Universityof Chicago
Graduate School of Business
Chicago, IL60637
Ward Edwards
Social Science Research Institute
Universityof Southern California
University Park
Los Angeles, CA90089-1111
Thomas Eppel
Krannert School of Management
Purdue University
Krannert Building
West Lafayette, IN 47907
Stuart Eriksen
13341 Eton Place
Santa Ana. CA92705
Ronald A. Howard
Departmentof Engineering-Economic Systems
Stanford University
Stanford, CA 94305
Ralph L. Keeney
Safety and Systems Management
Universityof Southern California
University Park
Los Angeles, CA90089-0021
ix
x
CONTRIBUTING AUTHORS
L. Robin Keller
Graduate School of Management
Universityof California, Irvine
Irvine, CA 92717
Irving H. LaValle
A.B. Freeman School of Business
Goldring/Woldenberg Hall
Tulane University
New Orleans, LA 70118-5669
R. Duncan Luce
Irvine Research Unit in Mathematical Behavioral Science
University of California, Irvine
Irvine, CA 92717
David Matheson
Strategic Decisions Group
2440 Sand Hill Road
Menlo Park, CA 94025-6900
John M. Miyamoto
Departmentof Psychology
University of Washington
Seattle, WA98195
Rakesh K. Sarin
Anderson Graduate School of Management
University ofCalifornia, Los Angeles
405 Hilgard Avenue
Los Angeles, CA 90024-1481
Uzi Segal
California InstituteofTechnology
Departmentof Humanities & Social Sciences
Baxter Hall, Room 215
Pasadena, CA 91125
George Wu
Graduate School of BusinessAdministration
Harvard University
Boston
MA 02163