The Pre-Outcome Period and the Utility of Gambling

Between Hope and Fear: The Psychology of Risk

“…T7he temporal element is what gives risk both savor and sting. Pope (1983) has criticized expected utility theory for having i'ncred the time between the decision and the resolution of the uncer-tainty, what she calls the pre-outcome period during which fear and hope operate. She points out that the period can be long not only for long-term decisions such as individuals choosing careers, governments embarking on social programs, and businesses making major capital investments, but also for repeat short-term.…”

Scitovsky, Behavioural Economics, and Beyond

“…www.economics-ejournal.org Pope (1983) introduced into algebraic decision modelling the pre-resolution period with its duration being a key factor in determining people's anticipated utility from an act. She furnished examples of this impact on utility by how longer delays before an outcome is fully resolved alter the amount of hope and fear experienced during it, generate worse planning difficulties, and leave a person deprived of access to property for a longer time.…”

“…She furnished examples of this impact on utility by how longer delays before an outcome is fully resolved alter the amount of hope and fear experienced during it, generate worse planning difficulties, and leave a person deprived of access to property for a longer time. In a similar vein Pope andSelten (2010/2011) introduce the pre-resolution period into the individual's preferences. They justify this assumption by observing that "[m]any people would like to know as soon as possible whether they have passed an exam […].…”

“…Many people would not like to know the exact day of their death years in advance." Pope andSelten (2010/2011) also recognise that emotions, such as "curiosity, hope, or fear", are typically involved in the pre-resolution period, and that "in suitable dosages, such emotions enhance decision making", thus also citing Damasio (1994). Finally, they refer to Scitovsky (1976) by recognising that "[t]hose taking choices yielding too little in the way of thrills and hope for the brain's needed stimulation often compensate with other choices that involve socially and personally destructive behaviour such as juvenile delinquency and gambling."…”

“…The crucial role of the pre-resolution period in decision making under uncertainty has been examined at the theoretical level by Pope andSelten (2010/2011). They show that when atemporal expected utility theory is extended to include the length of the pre-resolution period, with for axiomatised expected utility theory a natural limit property, the individual's preferences are unaffected by the length of the resolution time.…”