Expected utility
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Revision as of 08:08, 29 August 2009 by 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...')
"Expected utility" just means 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.
