An expected utility based cost-benefit analysis is in general fragile to its distributional assumptions. We derive … necessary and sufficient conditions on the utility function of the expected utility model to avoid this. The conditions ensure … that expected (marginal) utility remains finite also under heavy-tailed distributional assumptions. Our results are context …

Neumann-Morgenstern expected utility functions using cooperative game theory. The social network literature studies various … measures can be supported as von Neumann-Morgenstern expected utility functions, reflecting preferences over different network … ordinary risk . We show that this leads to a class of centrality measures that is fully determined by the degrees (i.e. the …

framework demonstrates that incorporating descriptively-valid theories of risk in a principal-agent setting leads to incentive …

In this paper, we connect the social network theory on centrality measures to the economic theory of preferences and … utility. Using the fact that networks form a special class of cooperative TU-games, we provide a foundation for the degree … measure as a von Neumann-Morgenstern expected utility function reflecting preferences over being in different positions in …

) rank-dependent utility and (ii) a desire to conform to the wishes of the majority. The evidence provides clear support for …

expected profit maximizing loss probability within an expected utility framework. We then use Köszegi and Rabin's (2006, 2007 …

analyze the effect of risk aversion, ambiguity aversion and the elasticity of intertemporal substitution on the willingness to … pay to avoid climate change risk. The first part of the paper analyzes a general disaster (jump) risk model with a … constant arrival rate of disasters. This provides useful intuition in how preferences influence valuation of long-term risk …

estimate of risk aversion ? and the time preference discount rate ? perindividual. This can be done because the consumption of …