He also presented a formulation that accounts for the risk attitude of a decision maker by maximizing the

expected utility of a decision.

Browne (1995) made use of Brownian motion with drift to characterize the dynamic process of liquid assets, and studied the insurer's optimal investment under the

expected utility.

Under the assumption that

expected utility is concave in self-protection and saving, we can utilize Lemma 1 in the Appendix again.

Another alternative, developed by various economists, modifies

expected utility in certain ways that make it a bit better - though still not great - at explaining broad financial market movements.

The outsourcer's

expected utility is equal to expected profit.

The team manager maximizes her

expected utility by choosing the optimal contract:

The objective of the routing decision is to maximize the

expected utility of packet delivery with optimized transmit power and retry limit allocation.

Lemenhe Concludes that there are preferences explained by the

Expected Utility Theory and that there are preferences explained by the Prospect Theory and that there are preferences that are not explained by the

Expected Utility Theory nor by the Prospect Theory.

Based on rational choice theory, this essay approaches these puzzles by analyzing how the

expected utility of protesting is affected by the following variables: the probability of having a new government, the probability of getting caught and receiving punishment when protesting, and the expected costs and benefits of doing so.

If within-subjects treatments are to be implemented: (i) paying one decision randomly (POR) is incentive compatible only for

expected utility theory; (ii) paying all decisions independently (PAI) at the end of the experiment is not incentive compatible for any decision theory; (iii) paying all decisions sequentially (PAS) is incentive compatible for decision theories defined on income such as cumulative prospect theory and the

expected utility of the income model; and (iv) paying all decisions correlated at the end of the experiment (PAC) is incentive compatible for the dual theory of

expected utility (Yaari, Econometrica, 1987).

i) the

expected utility of an office holder at the beginning of period 2 is given by

Moreover, in the context of an

expected utility model, including the additional frictions that we measure has direct implications for risk preference estimates, which are typically assumed to be the only source of persistent unobserved preference heterogeneity in such models.