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Decision Utility Theory: Back to von Neumann, Morgenstern, and Markowitz
Kontek, Krzysztof - Volkswirtschaftliche Fakultät, … - 2010
Prospect Theory (1979) and its Cumulative version (1992) argue for probability weighting to explain lottery choices …. Decision Utility Theory presents an alternative solution, which makes no use of this concept. The new theory distinguishes … (1952), and applies the expected decision utility value similarly to the theory by von Neumann and Morgenstern (1944 …
Persistent link: https://www.econbiz.de/10008756284
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The Illusion of Irrationality
Kontek, Krzysztof - Volkswirtschaftliche Fakultät, … - 2009
violation of the Expected Utility Theory Axioms – may be easily explained by assuming that changes in wealth (i.e. gains and … absolute terms leads to the conclusion that the choices violate the axioms underlying Expected Utility Theory, and are …
Persistent link: https://www.econbiz.de/10008458513
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The “more is less” phenomenon in Contingent and Inferred valuation
Stachtiaris, Spiros; Drichoutis, Andreas; Klonaris, Stathis - Volkswirtschaftliche Fakultät, … - 2011
We examine inconsistencies in preference orderings of the “more is less” kind (Alevy et al. 2011) using the Contingent valuation (CV) and the Inferred valuation (IV) method (Lusk and Norwood 2009a, 2009b). We find that when moving in a familiar market for consumers (i.e., the food market) we...
Persistent link: https://www.econbiz.de/10008871295
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The Effects of Induced Mood on Preference Reversals and Bidding Behavior in Experimental Auction Valuation
Drichoutis, Andreas; Nayga, Rodolfo; Klonaris, Stathis - Volkswirtschaftliche Fakultät, … - 2010
This article contributes to the research agenda of accommodating psychological insights in conventional lab experiments. We specifically test whether inducing subjects into different mood states has a significant effect on subjects rationality (in the form of preference reversals) and on bidding...
Persistent link: https://www.econbiz.de/10008685165
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Repeated Rounds with Price Feedback in Experimental Auction Valuation: An Adversarial Collaboration
Corrigan, Jay; Drichoutis, Andreas; Lusk, Jayson; … - Volkswirtschaftliche Fakultät, … - 2011
It is generally thought that market outcomes are improved with the provision of market information. As a result, the use of repeated rounds with price feedback has become standard practice in the applied experimental auction valuation literature. We conducted two experiments to determine how...
Persistent link: https://www.econbiz.de/10008836730
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Incentives and Risks in Relationships Between the Principal and the Agent
Minasyan, Vigen - Volkswirtschaftliche Fakultät, … - 2014
The paper addresses a basic model of moral hazard (risk) [Gibbons, 2010; Gibbons, 2005] and suggests some of its modifications. In the basic model of moral risk, questions are put and examined that have not been considered in the previous researches. In particular, it is proved that the level of...
Persistent link: https://www.econbiz.de/10011123517
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A Quantum-Conceptual Explanation of Violations of Expected Utility in Economics
Aerts, Diederik; Broekaert, Jan; Czachor, Marek; … - Volkswirtschaftliche Fakultät, … - 2011
The expected utility hypothesis is one of the building blocks of classical economic theory and founded on Savage's Sure … presence of the 'disjunction effect'' of decision theory and use our earlier study of this effect in concept theory to put …
Persistent link: https://www.econbiz.de/10011107454
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Are small groups expected utility?
Morone, Andrea; Morone, Piergiuseppe - Volkswirtschaftliche Fakultät, … - 2012
. Specifically, we intend to assess if there exists a risky choice theory that statistically fits group decisions significantly …
Persistent link: https://www.econbiz.de/10011108949
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A Theoretical Assessment on Optimal Asset Allocations in Insurance Industry
Jarraya, Bilel; Bouri, Abdelfettah - Volkswirtschaftliche Fakultät, … - 2013
In recent years the financial markets known a rapid development and become more and more complex. So, many regulatory requirements, focused on banks as well as insurance sector, have been developed. These regulatory are concentrated essentially on business risk control and required capital to...
Persistent link: https://www.econbiz.de/10011110361
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Optimal Use of Put Options in a Stock Portfolio
Peter N, Bell - Volkswirtschaftliche Fakultät, … - 2014
In this paper I consider a portfolio optimization problem where an agent holds an endowment of stock and is allowed to buy some quantity of a put option on the stock. This basic question (how much insurance to buy?) has been addressed in insurance economics through the literature on rational...
Persistent link: https://www.econbiz.de/10011114281