The New Directions of Expected Utility Theory

Over the past two decades , an enormous amount of work has been done to improve the Expected Utility model Two areas have attracted major attention : the possibility of describing unforeseen contingencies and the need to accommodate the kind of behavior referred to in Ellsberg 's paradox. This article critically assesses the Expected Utility model and its interpretations , as well as the basic principles underlying the referred extensions, with an emphasis on their applications.