Non-Expected Utility and Risk Management |
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| Editor:
| Gollier, Christian
Machina, Mark J. |
| Series title: | Geneva Papers |
| ISBN: | 978-0-7923-9642-0 |
| Publication Date: | Sep 1995 |
| Publisher: | Springer Netherlands
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| Imprint: | Springer |
| Book Format: | Hardback |
| List Price: | USD $109.99 |
Book Description:
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Expected utility provides simple, testable properties of the optimum behavior that should be displayed by risk-averse individuals in risky decisions. Simultaneously, given the existence of paradoxes under the expected utility paradigm, expected utility can only be regarded as an approximation of actual behavior. A more realistic model is needed. This is particularly true when treating attitudes toward small probability events: the standard situation for insurable risks. Non-Expected...
More DescriptionExpected utility provides simple, testable properties of the optimum behavior that should be displayed by risk-averse individuals in risky decisions. Simultaneously, given the existence of paradoxes under the expected utility paradigm, expected utility can only be regarded as an approximation of actual behavior. A more realistic model is needed. This is particularly true when treating attitudes toward small probability events: the standard situation for insurable risks. Non-Expected Utility and Risk Management examines whether the existing results in insurance economics are robust to more general models of behavior under risk.