Reassessing the Testing of Generic Utility Models for Mixed Gambles

Miyamoto's generic utility theory (GUT) is a bilinear form that captures a diverse set of utility formulations. The present study, using mixed gambles, experimentally evaluates GUT in a fashion similar to the Chechile and Cooke and the Chechile and Butler studies, but employs a novel method of analysis. The reasons for the new method is to solve a fundamental flaw with the regression approacch used in the earlier experiments and to solve a problem of model overfit. Several participants from the earlier Chechile and Butler experiment are now recognized as being consistent with the GUT representation, but many are not. A new experiment, with actual economic consequences for the participants, does not support GUT. Suggestions are provided for subsequent research studies assessing the GUT class of models.