# Difference between revisions of "Expected utility"

From Lesswrongwiki

Steven0461 (talk | contribs) (Created page with '{{wikilink|Expected utility hypothesis}} "Expected utility" just means the expected value of a utility function. Von Neumann and Morgenstern proved the [http://www.econ...') |
m |
||

Line 1: | Line 1: | ||

{{wikilink|Expected utility hypothesis}} | {{wikilink|Expected utility hypothesis}} | ||

− | + | '''Expected utility''' is the [[expected value]] of a [[utility function]]. | |

− | Von Neumann and Morgenstern proved the [http://www.econ.hku.hk/~wsuen/uncertainty/eu.pdf expected utility theorem], which says that when a rational agent chooses between different "gambles" (probability distributions over outcomes), the utility of such a gamble can always be seen as the | + | Von Neumann and Morgenstern proved the [http://www.econ.hku.hk/~wsuen/uncertainty/eu.pdf expected utility theorem], which says that when a rational agent chooses between different "gambles" (probability distributions over outcomes), the utility of such a gamble can always be seen as the expected utility of the gamble's outcome. |

Humans, of course, are a different story. | Humans, of course, are a different story. | ||

− | ==See | + | ==See also== |

− | * [[Allais paradox]] | + | |

− | * [[ | + | *[[Allais paradox]] |

− | * [[ | + | *[[Decision theory]] |

− | * [[ | + | *[[Instrumental rationality]] |

+ | *[[Prospect theory]] | ||

{{stub}} | {{stub}} | ||

+ | [[Category:Concepts]] |

## Revision as of 09:23, 29 August 2009

**Expected utility** is the expected value of a utility function.

Von Neumann and Morgenstern proved the expected utility theorem, which says that when a rational agent chooses between different "gambles" (probability distributions over outcomes), the utility of such a gamble can always be seen as the expected utility of the gamble's outcome.

Humans, of course, are a different story.