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expected utility

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expected utility [ek′spek·təd yü′til·əd·ē]
(mathematics)


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If both A and B make high effort, the expected utility of each agent, derived from the payment, is [MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII] (4) And the expected inequity aversion disutility of each agent can be represented by [MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII] (5) So, the expected utility of each agent can be denoted as EU ([e.
The experiment was designed to investigate three specific issues/hypotheses: (i) test the rationality of predictions; (ii) examine if subjects increase the allocations to the dominated asset B as the correlation in returns decreases; and (iii) check the compatibility of allocations with rational models of choice, such as expected utility (EU) and rank-dependent utility (RDU).
k](t) is the consumption rate, so the wealth of the k th investor satisfies the following accumulation equation: [MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII] (3) As in Breeden (1979), it is possible that fluctuations in some of the elements of the state vector do not affect any individual's expected utility of lifetime consumption, given the individual's wealth.
 
 
 
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