ENGLISH

Non-Expected Utility and Risk Management: A Special Issue of the Geneva Papers on Risk and Insurance Theory

By Christian Gollier , Christian Gollier (auth.) , Mark Machina (eds.)

Book information

Publisher
Springer Netherlands
Year
1995
ISBN
978-90-481-5799-0, 978-94-017-2440-1
DOI
10.1007/978-94-017-2440-1
Language
english
Format
PDF
Filesize
6 MB (6211031 bytes)
Edition
1
Pages
150\146
Orientation
yes
Scanned
yes
Time added
2013-08-01 04:00:00
Operation Research/Decision Theory; Finance/Invest

Description

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 Utility and Risk Management examines whether the existing results in insurance economics are robust to more general models of behavior under risk.

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