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Published September 1987 | public
Journal Article

Recent Developments in Modelling Preferences under Risk


Ever since von Neumann and Morgenstern presented their expected utility theory, the axioms (assumptions) underlying their theory have been intensely debated and tested. Recently, a variety of theories have been presented which model preferences by weakening some of the assumptions of expected utility theory. We describe some of these theories, examine their properties, and provide insights into how they work. Implications for different areas of business research are discussed.

Additional Information

© 1987 Springer-Verlag. Received June 5, 1987; Accepted in revised form July 27, 1987. We would like to thank Professors Jon Baron, Franz Eisenflihr, Robin Keller, Karl Mosler, and two anonymous referees. We especially thank Professor Rakesh Sarin for helpful comments, and all the girls in the UCLA sculpture garden for inspiring us to think about preferences.

Additional details

August 19, 2023
October 23, 2023