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Friday, 30 May 2025 09:46

New blog post with Ollie Hulme, called "Expected-utility maximizers don't maximize utility."

Why? Because utility is not usually an ergodic quantity in the mathematical models used by economists, and maximizing its expected value doesn't mean much in the real world. 

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New post from DRCMR's Ollie Hulme and his work with Ole Peters of London Math Lab. The work covers theories of decision-making in psychology and economics. They show how agents behaving according to prevailing utility theories generally fail to maximise utility over time. They argue why this is a fundamental error, and that this may account for why these theories are not good models of human behavior. Have a read: https://lnkd.in/dXemXMND