All of the following theories seek to explain deviations from the rational model of behavior at extreme probabilities, except
A) Weighted Expected Utility Theory
B) Probability Weighting
C) Expected Utility Theory.
D) Rank Dependent Expected Utility.

Question

Quizplus · Accepted Answer

Expected Utility Theory (C) does not seek to explain deviations from the rational model of behavior at extreme probabilities. Instead, it is the foundational model that assumes rational behavior under uncertainty, where individuals maximize their expected utility. The other theories (A, B, D) are modifications or alternatives that attempt to account for observed deviations from the predictions of Expected Utility Theory, such as the overweighting or underweighting of extreme probabilities.

All of the Following Theories Seek to Explain Deviations from the Rational