A Simple Model for the Utility of Gambling
- 1 December 1980
- journal article
- Published by Cambridge University Press (CUP) in Psychometrika
- Vol. 45 (4) , 435-448
- https://doi.org/10.1007/bf02293607
Abstract
A model of the utility of gambling is presented in a modified von Neumann-Morgenstern format. Axioms imply a utility function that preserves preferences between sure things and between gambles. The addition of a utility of gambling term to the expected utility of a gamble preserves preference comparisons between gambles and sure things. Aspects of the utility of gambling are noted, and comparisons are made to standard concepts of risk attitudes.Keywords
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