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Testing rank-dependent utility theory for health outcomes

✍ Scribed by Adam Oliver

Publisher
John Wiley and Sons
Year
2003
Tongue
English
Weight
211 KB
Volume
12
Category
Article
ISSN
1057-9230

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✦ Synopsis

Abstract

Systematic violations of expected utility theory (EU) have been reported in the context of both money and health outcomes. Rank‐dependent utility theory (RDU) is currently the most popular and influential alternative theory of choice under circumstances of risk. This paper reports a test of the descriptive performance of RDU compared to EU in the context of health. When one of the options is certain, violations of EU that can be explained by RDU are found. When both options are risky, no evidence that RDU is a descriptive improvement over EU is found, though this finding may be due to the low power of the tests. Copyright Β© 2002 John Wiley & Sons, Ltd.

πŸ“œ SIMILAR VOLUMES

A test of rank-dependent utility in the
A test of rank-dependent utility in the context of ambiguity
✍ Hein Fennema; Peter Wakker πŸ“‚ Article πŸ“… 1996 πŸ› Springer 🌐 English βš– 913 KB

Experimental investigations of non-expected utility have primarily concentrated on decision under risk Uprobability triangles"). The literature suggests, however, that ambiguity is one of the main causes for deviations from expected utility (EUt. This article investigates the descriptive performance