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Alternatives to expected value theory

Although expected value theory is the dominant paradigm in decision theory, it has problems, such as those raised by bounded and unbounded values, and by causal and evidential approaches. This leaves open the possibility of discovering an alternative decision theory.

One possibility would be to introduce some form of risk aversion into the decision theory, such as that proposed by Lara Buchak.[1] Other alternative theories include rank-dependent expected utility theory, prospect theory, and regret theory, although some of these are more commonly used as descriptive theories than normative models.


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Posts tagged Alternatives to expected value theory