A college student might have a budget for the month. If they lose 100$ out of a budget of 300$ that they usually need the pain might be bigger than the gain from having a 410$ budget instead of the 100$ budget.
If however offered the bet for 1000$ it makes sense to somehow get a loan for the 1000$ given the large potential upside.
Just because the utility function that models this is more complex than what you assume doesn’t mean that it’s not an utility function.
If you rejected the first bet and accepted the second bet, just that[4] is enough to rule you out from having any[5] utility function consistent with your decisions.[6]
I argue that the claim is false. Even if there’s a claim in the link paper that’s more complex and that’s true, that doesn’t change that the claim you are making in the beginning still is false.
A college student might have a budget for the month. If they lose 100$ out of a budget of 300$ that they usually need the pain might be bigger than the gain from having a 410$ budget instead of the 100$ budget.
If however offered the bet for 1000$ it makes sense to somehow get a loan for the 1000$ given the large potential upside.
Just because the utility function that models this is more complex than what you assume doesn’t mean that it’s not an utility function.
While this is all good speculation, you could also look at the experimental design in the linked paper :)
Your post makes the claim
If you rejected the first bet and accepted the second bet, just that[4] is enough to rule you out from having any[5] utility function consistent with your decisions.[6]
I argue that the claim is false. Even if there’s a claim in the link paper that’s more complex and that’s true, that doesn’t change that the claim you are making in the beginning still is false.