Approximate Expected Utility Rationalization

Abstract We propose a new measure of deviations from expected utility theory. For any positive number e, we give characterization the datasets with rationalization that is within e (in beliefs, utility, or perceived prices) (EU) theory, under assumption risk aversion. The can then be used as how far data to EU apply our methodology three large-scale experiments. Many subjects in these experiments are consistent maximization, but not maximization. Our distance correlated subjects’ demographic characteristics.