The standard gamble (SG) method is often regarded as the most appropriate for the elicitation of utility, at least when risk is involved in decisions. This is because it follows the axioms of von Neumann & Morgenstern’s (1944) expected utility theory, which is commonly thought of as being the appropriate normative model for decision making under uncertainty. The SG method usually involves asking a person to choose between a certain option (where the person remains in Health State A for ‘X’ years), and a risky option (where the person either lives in full health for ‘X’ years or dies immediately). The probability of immediate death is altered until the point of indifference is identified (i.e. where the respondent values both options equally). If the point of indifference is identified when the probability of death is, for example 75%, then this would imply that the individual values Health State A as 75% of full health. Both options would then give the same expected value of QALYs, for example 7.5 QALYs if ‘X’ was 10 years, and the utility of Health State A would be 0.75. The SG method has limitations in that it relies on the respondent being able to interpret complex probabilities, and also assumes that there are no biases towards ‘certain’ outcomes.
How to cite: Standard Gamble [online]. (2016). York; York Health Economics Consortium; 2016. https://yhec.co.uk/glossary/standard-gamble/