We introduce range and sign dependent utility, an integrative behavioral model for uncertain cash flows. For gambles played today, the model can be seen as an extension of original prospect theory based on range, rather than rank. For single future payouts, the model agrees with hyperbolic...

Rabin and Thaler (2001) declared Expected Utility an ex-hypothesis or a dead parrot alluding to the famous sketch from Monthy Pythons Flying Circus. Following Cox and Sadiraj (2006) and others, one should distinguish between Expected Utility (EU) theory (a purely mathematical theory based on...

In this paper I introduce a concept of simple strategy and de fine three kinds of such strategies. For three classes of utility functions - CARA, DARA and CRRA I state and prove equivalent characterizations in terms of the corresponding simple strategy characteristics and the corresponding...

In this paper I analyze operational measure of riskiness defi ned by Foster and Hart (2007). I give simple intuition behind their main result. Then I extend the concept of riskiness measure in two respects - I de fine a generalized riskiness measure based on decreasing absolute risk aversion...

In this paper I show that within expected utility large buying and selling price gap is possible and Rabin (2000) paradox may be resolved if only initial wealth is allowed to be small. It implies giving up the doctrine of consequentialism which may be reduced to requiring initial wealth to be...