A Process Approach to the Utility for Gambling |
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Authors: | Le Menestrel Marc |
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Institution: | (1) Departament d'Economia i Empresa, Ramon Trias Vargas, Marc le Menestrel, Universitat Pompeu Fabra, E-08005 Barcelona, Spain |
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Abstract: | This paper argues that any specific utility or disutility for gambling must be excluded from expected utility because such a theory is consequential while a pleasure or displeasure for gambling is a matter of process, not of consequences. A (dis)utility for gambling is modeled as a process utility which monotonically combines with expected utility restricted to consequences. This allows for a process (dis)utility for gambling to be revealed. As an illustration, the model shows how empirical observations in the Allais paradox can reveal a process disutility of gambling. A more general model of rational behavior combining processes and consequences is then proposed and discussed. |
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Keywords: | Gambling Expected utility Process utility Rationality Consequentialism |
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