Anticipated Utility: Some Developments in the Economic Theory of Uncertainty

Abstract

This thesis is a study in the economics of uncertainty. The literature in this field has grown so rapidly that even a survey of the field as a whole would require more space than is available here. Nevertheless, I have aimed at a kind of completeness. My object has been to present an integrated development from basic notions of choice and uncertainty to theoretical and policy applications. My central claim is that Expected Utility theory has been superseded by more general models which retain its desirable properties such as transitivity and preservation of dominance while being consistent with behavior which is proscribed by Expected Utility theory but frequently observed in practice. One such general model, Anticipated Utility theory, is developed in detail in the thesis.