Abstract
One of the most notable counterexamples to expected utility theory is the “Allais paradox” ( M. Allais, 1953, Econometrica, 31, 503–546). A number of alternative theories have been proposed in an attempt to resolve this paradox, notably including U. S. Karmarkar's subjectively weighted utility (SWU) theory ( Organizational Behavior and Human Performance, 1978, 21, 61–72; 1979 , 24, 67–72). It is shown that SWU theory necessarily involves violations of dominance, but that the theory can be modified to avoid these violations. The result is a special case of J. Quiggin's anticipated utility theory (1982, Journal of Economic Behaviour and Organisation, 3, 323–343).
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