Expectation theories of decision making for duplex gambles

Abstract

Complete tests of subjectively expected utility (SEU), subjectively expected value (SEV), expected utility (EU) and expected value (EV) theories were made for duplex gambles without measuring subjective probability or subjective utility. All gambles were hypothetical and offered on booklets. The duplex gambles consisted of winning gambles, which offered a chance to win a certain amount of money or to break even; and losing gambles, which offered a chance to lose a certain amount of money or break even. The results indicated that SEU, SEV and EU theories could not account for the strategies of 33%, 53% and 86% of the Ss respectively in the losing form of gambles, while EV theory accounted for 78% of the behavior of Ss. In the winning form of gambles, SEU, SEV and EU theory held for 77%, 65%, and 54% of the Ss respectively, while EV theory held for only 40% of the Ss. Suggestions for further research were made.