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Kaneko, Fumihiro
Year of Publication: 
Series/Report no.: 
Center Discussion Paper 774
I analyze observed choice between lotteries from an outcome-oriented point of view in the framework of choice between random variables. I characterize a choice maker, who faces a choice situation between lotteries, by (1) a surmising process that associates, with a pair of lotteries, a set of well-defined choice situations between random variables, and (2) a choice set that is a collection of well-defined choice situations. I give a partial axiomatic foundation of the theory. The theory is applied to explain the well-known paradoxes in expected utility theory.
Keywords: Expected Utility Theory
SSA Representation
SSB Representation
Prospect Theory
Choice under Uncertainty
Document Type: 
Working Paper

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