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Subjective Expected Utility Model Essay Example

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Subjective Expected Utility Model

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The experiment was divided into four variables that is role, location, level of temptation and subject sex. This model assumes that from among several behavior alternative of an individual, an individual will always attempt to find an alternative whose outcomes contain the greatest utility. The subjective expected utility resulting from a course of action stand for a product of subjective probability of its happening and its utility subject. In the experiment, the main concern was about the role of stimulus person who when he picked the money dropped by a person will choose whether to return or not. The roles chosen because of their relevance to the circumstances include bystander, beggar, police and pickpocket. The SEU of the dishonest behavior is expected to move from the lowest level to the highest level.After the experiment was conducted, the results show the usefulness of using subjective expected utility model in moral judgments and behaviors. It also shows that the norms of honesty are so much governed by the functions of the people involved. The female students reveal a bigger ethical sensitivity than the male students, these shows the difference in socialization in male and female students. The observed possibility of honesty was greater and recommendation for honesty was stronger for the functions of police and bystander in comparison with those of beggars and pickpockets. All the result was interpreted by the use of SEU model.The authors of this article are proposing a subjective expected utility method that is based on primitives; these means that an act will be judged in two ways, either attractive or unattractive. Though many experiments have shown its inability to explain behavior of several objects, it has remained an important point in several works in decision under uncertainty. This is as a result of distinctive combination of simplicity, analytical tractability and normative appeal. To get the behavioral foundation for this model, the article explains that four routes need to be followed. The first route work together with a finite set of states and a finite set of consequences. Having worked together it then applies separation techniques to make sure that the resulting equalities and inequalities should not be contradictory. The second one was put forward by savage. This method does not make any hypothesis on the set of consequences but it needs rich set of

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