Description
Return a two-person inequality-aversion utility term.
Decision models distinguish monetary payoffs, probabilities, model values and subjective equivalents. Discounting, probability weighting and reference-dependent utility terms depend on supplied parameters and cannot by themselves establish actual preferences or an appropriate allocation.
Return a two-person inequality-aversion utility term.
When to use this tool
Use Inequality Aversion Advantage Disadvantage Term when evaluating the stated decision-model, lottery or discount contribution.
How to use the tool and how it works
- Enter ownPayoff, otherPayoff, disadvantageWeight, advantageWeight. Use the units and conventions below.
- Run the tool. Correct any format, range, or cross-field input error before interpreting the output.
- Read disadvantagePenalty, advantagePenalty, utility. Use the output convention below.
Return a two-person inequality-aversion utility term. Require nonnegative weights; disadvantage penalizes max(0,other-own), advantage penalizes max(0,own-other), utility subtracts both weighted terms from own payoff.1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| ownPayoff | Own Payoff | Required. Finite number. |
| otherPayoff | Other Payoff | Required. Finite number. |
| disadvantageWeight | Disadvantage Weight | Required. Finite number; minimum 0. |
| advantageWeight | Advantage Weight | Required. Finite number; minimum 0. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| disadvantagePenalty | Disadvantage Penalty | Required. Finite number. |
| advantagePenalty | Advantage Penalty | Required. Finite number. |
| utility | Utility | Required. Finite number. |
{
"input": {
"ownPayoff": 10,
"otherPayoff": 20,
"disadvantageWeight": 0.5,
"advantageWeight": 0.25
},
"output": {
"disadvantagePenalty": 5,
"advantagePenalty": 0,
"utility": 5
}
}Limitations and assumptions
- Parameters and payoffs are supplied; no empirical preference fit, interpersonal comparability or appropriate allocation is established.
- Inputs must satisfy both the field types and the cross-field conditions above. Invalid input causes an error; a successful false flag or documented placeholder is a different result.
- Numeric calculations use binary floating point unless exact decimal-integer arithmetic is explicitly stated. No hidden measurement tolerance or decimal rounding is added; nonfinite or out-of-contract results are rejected. Numeric signed-zero results are exported as zero.
Alternative or Complementary methods
Fit and validate an appropriate complete decision model against relevant observations; distinguish model scores from money and assess actual financial choices separately.
References
Similar or alternative tools
- Prospect Loss Aversion Value Gap
Return a reference-dependent piecewise prospect value.
- Regret Comparison Best Forgone Gap
Return best forgone payoff and nonnegative regret score.