Search Results - subject:"Utility function"

Another Solution for Allais Paradox : Preference Imprecision, Dispersion and Pessimism

Bayrak, Oben - 2016

Although there are alternative models which can explain the Allais paradox with non-standard preferences, they do not take the emerging evidence on preference imprecision into account. The imprecision is so far incorporated into these models by adding a stochastic specification implying the...

Persistent link: https://www.econbiz.de/10012990667

A Zero Effect Explains Deviations from Expected Utility in Allais-type Tasks

Incekara-Hafalir, Elif - 2016

This paper provides a simple explanation for systematic violations of expected utility theory in Allais-type tasks. We demonstrate that the main reason our participants violate expected utility theory is aversion to receiving a zero outcome, and not an attraction to a certain outcome. We call...

Persistent link: https://www.econbiz.de/10013007813

Embracing the Cognitive Dissonance Between Expected Utility Theory and Prospect Theory

Viole, Fred - 2016

utility function demonstrating both prospect theory and expected utility theory are quite relevant …

Persistent link: https://www.econbiz.de/10013008343

Incomplete Menu Preference and Ambiguity

Chandrasekher, Madhav - 2016

This paper studies a problem of choice under uncertainty in which a decision-maker's (DM) choices randomly map to consumption outcomes. The primitive is a binary relation on menus, where a menu is a set of possible ex post outcomes. After the DM selects a menu, nature (not the DM) makes a...

Persistent link: https://www.econbiz.de/10014126867

Optimal expected utility of wealth for two dependent classes of insurance business

Gosio, Cristina; Lari, Ester C.; Ravera, Marina - In: Theoretical economics letters 3 (2013) 2, pp. 90-95

Persistent link: https://www.econbiz.de/10010239638

The delimitation of Giffenity for the Wold-Juréen (1953) utility function using relative prices: A note

Sproule, Robert A. - 2020

: A study in Econometrics, 1953) utility function has been touted as the progenitor of a multi-decade search for those two …) utility function has ever been fully evaluated for Giffenity, with perhaps one minor exception, Weber (The case of a Giffen … and a clear cut precondition for Giffen behavior under the Wold-Juréen (1953) utility function. That is, the author shows …

Persistent link: https://www.econbiz.de/10012174690

The delimitation of Giffenity for the Wold-Juréen (1953) utility function using relative prices: A note

Sproule, Robert A. - In: Economics: The Open-Access, Open-Assessment E-Journal 14 (2020) 2020-26, pp. 1-8

) utility function has been touted as the progenitor of a multi-decade search for those two-good, particular utility functions …, which exhibit Giffenity. On the other hand, there is no evidence that the Wold-Juréen (1953) utility function has ever been … the Wold-Juréen (1953) utility function. That is, we show that if the price of Good 1 is greater than or equal to the …

Persistent link: https://www.econbiz.de/10012262773

Effects of fiscal devaluation in a closed economy

Sui, Jin - 2020

Fiscal devaluation works as an alternative instrument to monetary de- valuation, helping countries to regain competitiveness in a monetary union. Focusing on a closed economy, this paper analyzes its effects in a dynamic framework. In the case of an increasing relative love for variety, fiscal...

Persistent link: https://www.econbiz.de/10012287936

Markups in a two-country monopolistic competition model of trade with heterogeneous consumers

Oésarin, Aleksandr; Verbus, Valerij; Bakunina, Irina; … - In: Journal of Economic Structures 9 (2020) 13, pp. 1-12

utility function for different country consumers. The proposed framework extends the canonical Krugman's approach by revealing …

Persistent link: https://www.econbiz.de/10013288290

Inflation and risky investments

Laurila, Hannu; Ilomäki, Jukka - In: Journal of Risk and Financial Management 13 (2020) 12, pp. 1-10

The paper uses a Walrasian two-period financial market model with informed and uninformed constant absolute risk averse (CARA) rational investors and noise traders. The investors allocate their initial wealth between risky assets and risk-free fiat money. The analysis concentrates on the effects...

Persistent link: https://www.econbiz.de/10012611556