Quotes About Expected utility

Bernoulli's model lacks the idea of a reference point, expected utility theory does not represent the obvious fact that the outcome that is good for Anthony is bad for Betty. His model could explain Anthony's risk aversion, but it cannot explain Betty's risk-seeking preference for the gamble, a behavior that is often observed in entrepreneurs and in generals when all their options are bad.

choices are based upon expected utility. And once you have had experience with particular restaurants, CDs, or movies, future choices will be based upon what you remember about these past experiences, in other words, on their remembered utility.

If you want to maximize your expected utility, you try to save the world and the future of intergalactic civilization instead of donating your money to the society for curing rare diseases and cute puppies.