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expected utility
(redirected from Expected utility hypothesis)

   Also found in: Financial, Encyclopedia, Wikipedia 0.01 sec.
expected utility
n
(Mathematics & Measurements / Statistics) Statistics the weighted average utility of the possible outcomes of a probabilistic situation; the sum or integral of the product of the probability distribution and the utility function


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In section II, a primal two-period decision problem is defined for a competitive agent under the expected utility hypothesis.
Introduction The expected utility hypothesis is somewhat controversial.
Introduction The expected utility hypothesis predicts that, when the price of insurance is actuarially fair to the consumer, a risk-averse consumer will choose to fully insure against a potential loss.
 
 
 
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