Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/185546
Authors: 
Echenique, Federico
Imai, Taisuke
Saito, Kota
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper No. 7348
Abstract: 
We propose a new measure of deviations from expected utility, given data on economic choices under risk and uncertainty. In a revealed preference setup, and given a positive number e, we provide a characterization of the datasets whose deviation (in beliefs, utility, or perceived prices) is within e of expected utility theory. The number e can then be used as a distance to the theory. We apply our methodology to three recent large-scale experiments. Many subjects in those experiments are consistent with utility maximization, but not expected utility maximization. The correlation of our measure with demographics is also interesting, and provides new and intuitive findings on expected utility.
Subjects: 
expected utility
revealed preferences
JEL: 
D01
D81
Document Type: 
Working Paper

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