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This specific modeling instance aims at maximizing expected portfolio value, and penalizes possible losses.
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Investing, though, is about more than maximizing expected returns.
The agent may doubt that she chooses by maximizing expected utility.
These examples suggest that maximizing expected utility is not necessary for rationality.
These examples suggest that maximizing expected utility is not sufficient for rationality.
One possible answer is that expected utility theory is rational bedrock that means-end rationality essentially involves maximizing expected utility.
Given this model, we could then compare human performance to ideal performance maximizing expected gain.
In this paper, we applied a portfolio theory-based decision support tool that helps determine resource allocation in a way that maximizes expected return and minimizes uncertainty.
Why choose acts that maximize expected utility?
The optimal decision maximizes expected utility.
If expected utilities are partition-sensitive, then acts that maximize expected utility may be partition-sensitive.
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