The Evaluation of The Theory of Decision Making by Sampling with Taiwanese Participants

Economists have spent more than 200 years to understand the concept of utility. One self-evident presumption is that people want to keep in hand the objects of high utility. For example, given two lotteries, A and B, to be chosen, one to gain 1 dollar in 50% of chance and the other to lose 1 dollar in 80 % of chance, one should always choose lottery A rather than B. In this case, the expected rewards of A and B are 1 × 0.5 = 0.5 for A and −1 × 0.8 = −0.8 for B. However, the expected reward of an object is not its expected utility. Bernoulli (1738) asked people how much bet they would like to pay for playing the game called St. Petersburg paradox, in which people toss a fair coin and if the result was tail, they could toss the coin again; otherwise, they could get 2n dollars back, n =tossing times, and the game stopped. The expected value of this game is 0.5n2n for n times of tossing, which should be infinitely large as n increases, lim n→∞ 0.5n2n =∞. Thus, people should be willing to pay whatever bet to play this game. However, Bernoulli thought mos