According to a revised definition of Samuelson, a risk-averse agent is called a coward whenever he refuse even a small portion of a risky gamble exhibiting a positive expected payoff. This property may cause the invalidation of some of the basic theorems of the insurance and finance theory. As...

The book consists of three parts: The first part reviews the development in axiomatic utility theory under risk since the axiomatization of expected utility by von Neumann and Morgenstein. The second part explores some approaches to represent preferences which exhibit boundary effects. The third...

This book is devoted to investment decision-making under uncertainty. The book covers three basic approaches to this process: The stochastic dominance approach; the mean-variance approach; and the non-expected utility approach, focusing on prospect theory and its modified version, cumulative...