Utility Theories: Measurements and Applications
The Conference on "Utility:
Theories, Measurements, and Applications" met at the Inn at Pasatiempo in Santa Cruz, California, from June II to 15, 1989.
The all-star cast of attendees are listed as authors in the Table of Contents of this book (see p. V), except for Soo Hong
Chew and Amos Tversky. The purpose of the conference, and of National Science Foundation Grant No. SES-8823012 that supported
it, was to confront proponents of new generalized theories of utility with leading decision analysts com mitted to the implementation,
in practice, of the more traditional theory that these new theories reject. That traditional model is variously iden tified
in this book as expected utility or subjectively expected utility maximization (EU or SEU for short) and variously attributed
to von Neumann and Morgenstern or Savage. I had feared that the conference might consist of an acrimonious debate between
Olympian normative theorists uninterested in what people actually do and behavioral modelers obsessed with the cognitive illusions
and uninterested in helping people to make wise decisions. I was entirely wrong. The conferees, in two dramatic straw votes
at the open ing session, unanimously endorsed traditional SEU as the appropriate normative model and unanimously agreed that
people don't act as that model requires. (These votes had a profound impact on my thinking; detail about them and about that
impact is located in Chapter 10.
I Review.- 1 Properties of Utility Theories and Related Empirical Phenomena.- II The
Old Time Religion and Its Implementation.- 2 In Praise of the Old Time Religion.- 3 On the Foundations of Prescriptive Decision
Analysis.- 4 Generic Analysis of Utility Models.- III Generalized Utility Is Not Normative.- 5 Small Worlds and Sure Things:
Consequentialism by the Back Door.- 6 What Now for Generalized Utility Theory.- 7 The Independence Axiom Versus the Reduction
Axiom: Must We Have Both?.- IV What Should Descriptive Decision Models Look Like? What Do They Describe?.- 8 Rational Versus
Plausible Accounting Equivalences in Preference Judgments.- 9 Recent Tests of Generalizations of Expected Utility Theory.-
10 Toward the Demise of Economic Man and Woman; Bottom Lines from Santa Cruz.- V Discussion.- 11 Old and New Roles for Expected
and Generalized Utility Theories.- Author Index.
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