1. INTRODUCTION EXPECTED UTILITY THEORY
has dominated the analysis of decision making under risk. It has been generally accepted as a normative model of rational choice [24), and widely applied as a descriptive model of economic behavior, e.g. [15, 41 Thus, it is assumed that all reasonable people would wish to obey the axioms of the theory [47,36], and that most people actually do, most of the time. The present paper describes several classes of choice problems in which preferences systematically violate the axioms of expected utility theory. In the light of these observations we argue that utility theory, as it is commonly interpreted and applied, is not an adequate descriptive model and we propose an alternative account of choice under risk.