expected utility


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expected utility

[ek′spek·təd yü′til·əd·ē]
(mathematics)
McGraw-Hill Dictionary of Scientific & Technical Terms, 6E, Copyright © 2003 by The McGraw-Hill Companies, Inc.
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However, the risk of insolvency also impacts a customer's expected utility from choosing a contract at a specific insurer.
The decision model is called maxmin expected utility (MEU hereafter) whose beliefs are given by a set of probabilities, with decisions made to maximize the minimal expected utility of the act chosen.
For example, at diversion node F three different actions are possible: (1) using run 7.1 (action [a.sub.7]) and hence stop G; (2) using run 8.1 (action [a.sub.g]), and hence stop E; (3) using both run 7.1 and run 8.1, with the diversion rule of comparing the expected utility of boarding the first arriving run and the expected utility of the next run and then choosing the best (action [a.sub.7+8]).
Outer loop: Find the optimum sample size n to maximize the expected utility of decision d.
The expected utility of each customer under quotation lead time policy [??] is given by
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. Changhao and Rong Ximin (2011) took into the comprehensive account of the optimal portfolio optimization of the quadratic utility function under the random flow funds and the uncertain parameters.
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.
For each health plan j and for each health condition n, it calculates its conditional expected utility ([EU.sub.j,n]), assuming that it would choose its provider optimally (Bellman 1954).
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.
Expected utility function for a voter from group j in voting for candidate k is defined as follows: