According to the Rabin’s (2000) calibration theorem, expected utility theory implies risk neutral behavior for lotteries with small to medium stakes.  In such cases, even small degrees of risk aversion leads to implausibly high risk aversion over large stakes.  However, laboratory experiments over modest stakes show significant utility curvatures that predict absurdly high risk aversion over large stakes.  A modified utility approach using a Disappointment-Elation (D-E) framework is used to show that there is over estimation of the utility curvature when utilities are measured by various empirical methods leading to over estimation of risk aversion under expected utility theory. 

A new disappointment based risk aversion parameter, measuring the difference in salience between disappointment and elation of an individual is derived and the tradeoff method of utility elicitation is used to develop an empirical measure of this parameter.  Finally, this new risk aversion measure is extended to characterize disappointment based risk attitudes of groups.