1. Rabin criticizes this implication of expected utility theory on grounds of implausibility. 2. This defies conventional rationality behind subjective expected utility theory . 3. Theories of bounded rationality relax one or more assumptions of standard expected utility theory . 4. Recently, expected utility theory has been extended to arrive at more behavioral decision models. 5. Like any mathematical model, expected utility theory is an abstraction and simplification of reality. 6. Cumulative prospect theory is one popular generalization of expected utility theory that can predict many behavioral regularities. 7. Therefore, the validity of expected utility theory depends on the empirical validity of the independence axiom. 8. This differs from expected utility theory , in which a rational agent is indifferent to the reference point. 9. According to expected utility theory , the person should choose either 1A and 2A or 1B and 2B. 10. In expected utility theory , the individual does not care how the outcome of losses and gains are framed.