and the potential increments over it are evaluated by subjective expected utility with a risky utility function u. In … contrast to earlier approaches with models that aimed at separating riskless and risky utility, CT does not violate basic … irregularities like the expected utility paradoxes of Allais and Rabin, CT also separates risk attitude in the strong sense from …

A major virtue of von Neumann-Morgenstern utility, for example, in the theory of general financial equilibrium (GFE … utility, one which also delivers consistency between plan and execution - and more. In particular, it turns out that one … special case is in fact simply discounted expected utility. Moreover, this alternative formulation affords an extremely …

A testable form of the utility hypothesis results from identifying necessary condition(s) for the existence of a … utility function that rationalizes the price and quantity data, meaning a utility function that correctly predicts choices … that do not violate an agent's budget constraint. Possible inconsistencies with utility-maximizing choices are of no clear …

In this note we ask when Epstein-Zin-Weil (EZW) recursive utility over the infinite horizon is well-founded. EZW … recursive utility has a parameter $\gamma > 0$ representing risk aversion and a parameter $\psi > 0$ representing intertemporal … elasticity of substitution, and is an extension of time-additive isoelastic utility (which corresponds to the special case …