Regret aversion is offered as an alternative to Expected Utility Theory in order to understand which of the following phenomena:
A) The Allais Paradox.
B) The Saint Petersburg Paradox.
C) The Ellsburg Paradox.
D) The Reversal Paradox.

Question

Quizplus · Accepted Answer

Regret aversion is used to explain the Allais Paradox, where people's choices violate the expected utility theory due to the anticipation of regret from making a suboptimal decision.

Regret Aversion Is Offered as an Alternative to Expected Utility