The effects of temporal uncertainty resolution on the overall utility and suspense of risky monetary and survival gambles /

• Main Author: Cook, Victoria Tracy, 1960-
• Format: Others
• Language: en
• Published: McGill University 1989
• Subjects: Utility theory.; Uncertainty > Mathematical models.; Risk-taking (Psychology)
• Online Access: http://digitool.Library.McGill.CA:80/R/?func=dbin-jump-full&object_id=75966

We extend Kreps and Porteus' (1978, 1979a,b) temporal utility theory to include measures of suspense for gambles that vary in the timing of uncertainty resolution. Our f$ sp t$-modification (of their theory) defines overall utility and suspense in terms of two functions: a standard utility function and an iterative function whose properties determine attitude towards temporal uncertainty resolution. Suspense, which is increasing with time delay to uncertainty resolution, is defined as the "variance" of the standard utilities of the outcome streams taken about our measure of overall utility (rather than about the standard mean utility). We explore the properties of our measures and their implications for the overall utility and suspense of various key examples. Two preliminary experiments are reported which give some support for our overall utility and suspense measures, and which suggest that risk and suspense are different concepts. Iteration theory is also discussed in some detail.