Testing rank-dependent utility theory for health outcomes.

Abstract:

:Systematic violations of expected utility theory (EU) have been reported in the context of both money and health outcomes. Rank-dependent utility theory (RDU) is currently the most popular and influential alternative theory of choice under circumstances of risk. This paper reports a test of the descriptive performance of RDU compared to EU in the context of health. When one of the options is certain, violations of EU that can be explained by RDU are found. When both options are risky, no evidence that RDU is a descriptive improvement over EU is found, though this finding may be due to the low power of the tests.

journal_name

Health Econ

journal_title

Health economics

authors

Oliver A

doi

10.1002/hec.769

keywords:

subject

Has Abstract

pub_date

2003-10-01 00:00:00

pages

863-71

issue

10

eissn

1057-9230

issn

1099-1050

journal_volume

12

pub_type

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