OR Forum—Perspectives on Utility Theory

Abstract

Utility theory is a branch of decision analysis that is concerned with building models to explain and guide choice behavior under uncertainty in situations in which “long run” expected values are too simplistic. Beginning with Bernoulli in the 18th century, researchers have tried to analyze how people do and how people should make decisions when risk aversion is a factor. In this paper, we review some recent developments in the area.

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