Because Bernoulli's model lacks the idea of a reference point, expected utility theory does not account for the obvious fact that the outcome that is good for Anthony is bad for Betty.

Bernoulli's hypothesis states a person accepts risk both on the basis of possible losses or gains and the utility gained from the action itself.

The paper deals with the reception of Daniel Bernoulli's 1738 memoir by the marginalist economists. Bernoulli's main contributions are the suggestion to adopt expected utility as criterion for ...

W. Henry Chiu, Skewness Preference, Risk Taking and Expected Utility Maximisation, The Geneva Risk and Insurance Review, Vol. 35, No. 2 (December 2010), pp. 108-129 ...