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Distorted Probabilities and Choice under Risk by Clemens Puppe, Paperback | Indigo Chapters
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Distorted Probabilities and Choice under Risk by Clemens Puppe, Paperback | Indigo Chapters
From Clemens Puppe
Current price: $71.50
Coles
Distorted Probabilities and Choice under Risk by Clemens Puppe, Paperback | Indigo Chapters
From Clemens Puppe
Current price: $71.50
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Size: 25.4 x 242 x 1
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This book provides a systematic, formal treatment of a recently proposed extension of the expected utility model of choice under risk: the so-called rank-dependent utility model. In this approach the representation of preferences is based upon a (generalized) utility function defined on the outcome/probability-plane. The main purpose of the book is to demonstrate the flexibility of this model with respect to its explanatory power. This is achieved by analyzing a certain subclass of the rank-dependent utility approach which incorporates the notion of price-dependent distortions of probabilities. This particular approach captures an optimistic point of view towards gambling (as can often be observed), whilst being compatible with a suitably formulated concept of risk aversion. The resulting model is used to explain some of the observed behavioral patterns as the Allais-paradox and the behavior described by the Friedman-Savage hypothesis. | Distorted Probabilities and Choice under Risk by Clemens Puppe, Paperback | Indigo Chapters