Expected subjective value theory (ESVT): A representation of decision under risk and certainty

Paul W. Glimcher, Agnieszka A. Tymula

Research output: Contribution to journalArticlepeer-review


We present a descriptive model of choice derived from neuroscientific models of efficient value representation in the brain. Our basic model, a special case of Expected Utility Theory, can capture a number of behaviors predicted by Prospect Theory. It achieves this with only two parameters: a time-indexed “payoff expectation” (reference point) and a free parameter we call “predisposition”. A simple extension of the model outside the domain of Expected Utility also captures the Allais Paradox. Our models shed new light on the computational origins and evolution of risk attitudes and aversion to outcomes below reward expectation (reference point). It delivers novel explanations of the endowment effect, the observed heterogeneity in probability weighting functions, and the Allais Paradox, all with fewer parameters and higher descriptive accuracy than Prospect Theory.

Original languageEnglish (US)
Pages (from-to)110-128
Number of pages19
JournalJournal of Economic Behavior and Organization
StatePublished - Mar 2023


  • Decision-making
  • Expectation
  • Neuroeconomics
  • Normalization model
  • Utility

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management


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