More recent work in microeconomics has revealed the position of classical

utility theory as a rather extreme special case of a phenomenon found by many arguments to have much more complexity than the simple classical version.

Furthermore, in his treatment of the economics of taxation, Rothbard admits the theoretical possibility that greater taxation of labor income could induce an increase in labor supplied, going so far as to mention a substitution and an income effect, which his initial treatment of

utility theory and demand fails to mention and indeed directly contradicts (p.

Given the modern, revealed preference understanding of utility, there is little justification for excluding households that make compensation demands (reported, most likely, in terms of WTP to avoid or prevent a similar injury) but that express their motivations in ways that are inconsistent with the most individualistic and simplistic textbook treatments of economic

utility theory.

Prospect theory suggests decision makers exhibit three consistent violations of the assumptions of

utility theory in this two-staged process.

This measure, based on the theoretical foundations of

utility theory, stems directly from the individual's utility function, thus fully reflecting his or her preferences.

This formulation of EV has all of the assumptions of discrete choice analysis and is well grounded in random

utility theory.

The fundamental assumption in

utility theory is that the decision maker always chooses the alternative for which the expected value of the utility is maximal.

As noted in endnote 8, a significant number of child subjects exhibited decisions not consistent with expected

utility theory.

We also tested the hypothesis that the proportion of

utility theory responses was the same for k = 3 and k = 4 mugs.

Problems accompany the recognition of a moral dimension to consumer choice, since

utility theory - if it is to be useful empirically - must incorporate an intersubjective specification of the objects of preference.

of California, Berkeley) have assembled this legal textbook on experimental law and economics around the Expected

Utility Theory, a concept that studies how laws are designed to alter behaviors.

Basic material on

utility theory and insurance goes back to Borch (1968), using the utility concept of von Neumann and Morgenstern (1944).