Expected subjective value theory (ESVT): A representation of decision under risk and certainty

We present a descriptive model of choice derived from neuroscientific models efficient value representation in the brain. Our basic model, special case Expected Utility Theory, can capture number behaviors predicted by Prospect Theory. It achieves this with only two parameters: time-indexed “payoff expectation” (reference point) and free parameter we call “predisposition”. A simple extension outside domain also captures Allais Paradox. shed new light on computational origins evolution risk attitudes aversion to outcomes below reward expectation point). delivers novel explanations endowment effect, observed heterogeneity probability weighting functions, Paradox, all fewer parameters higher accuracy than