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This paper is motivated by the search for one cardinal utility for decisions under risk, welfare evaluations, and other contexts. This cardinal utility should have meaning prior to risk, with risk depending on cardinal utility, not the other way around. The rank-dependent utility model can...
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Methods for determining the form of utilities are needed for the implementation of utility theory in specific decisions. An important step forward was achieved when utility theorists characterized useful parametric families of utilities, and simplifying decompositions of multiattribute...
Persistent link: https://www.econbiz.de/10009460034
This paper compares classical expected utility with the more general rank-dependent utility models. First we show that it is the difference between the independence condition for preferences of expected utility and its comonotonic generalization in rank-dependent utility, that provides the exact...
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We present a preference foundation for Chance Theory (CT), a model of decision making under uncertainty where the evaluation of an act depends distinctively on its lowest outcome. This outcome is evaluated with the riskless value function u and the potential increments over it are evaluated by...
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