Chapter 17

Ambiguity and Nonexpected Utility

Edi Kami*,; Fabio Maccheroni; Massimo Marinacci    * Department of Economics, Johns Hopkins University, Baltimore, MD, USA The Warwick Business School, Warwick University, Coventry, UK Department of Decision Sciences and IGIER, Università Bocconi, Milano, Italy


This chapter reviews developments in the theory of decision making under risk and uncertainty, focusing on models that, over the last 40 years, dominated the theoretical discussions. It also surveys some implications of the departures from the “linearity in the probabilities” aspect of expected utility theory to game theory. The chapter consists of two main parts: The first part reviews models of decision making under risk ...

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