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Mathematical Basis of Quantum Decision Theory

Yukalov, Vyacheslav I.; Sornette, Didier

Following the ideas of Bohr, Von Neumann, and Benioff, we formulate quantum decision theory (QDT) as the quantum …-mechanical theory of measurement for probability operators. QDT captures the effect of superposition of composite prospects, including … standard probability theory and of classical utility theory. Our QDT formalizes systematically a broader class of decision …

Persistent link: https://www.econbiz.de/10005162985

- A BAYESIAN APPROACH TO UNCERTAINTY AVERSION

Feltkamp, Vincent; Halevy, Yoram - Instituto Valenciano de Investigaciones Económicas (IVIE) - 1999

The Ellsberg paradox demonstrates that peoples belief over uncertainevents might not be representable by subjective probability. We relate this paradox to other commonly observed anomalies, suchas a rejection of the backward induction prediction in the one-shot Ultimatum Game. We argue that the...

Persistent link: https://www.econbiz.de/10005731447

Asymmetric loss utility: an analysis of decision under risk

Strashny, Alex - EconWPA - 2004

This paper develops a utility model for evaluating lotteries. In estimating utility, risk averse people use an asymmetric loss function. Expected utility is seen as a special case that is a good approximation in some cases. The model resolves several paradoxes and makes easily falsifiable...

Persistent link: https://www.econbiz.de/10005118544

Asymmetric loss utility: an analysis of decision under risk

Strashny, Alex - EconWPA - 2004

This paper develops a utility model for evaluating lotteries. In estimating utility, risk averse people use an asymmetric loss function. Expected utility is seen as a special case that is a good approximation of the general case in some cases. The model resolves several paradoxes and makes...

Persistent link: https://www.econbiz.de/10005118587

Constant relative risk aversion and form equivalence classes

Battermann, Harald L.; Broll, Udo; Wahl, Jack E. - Fachbereich Wirtschaftswissenschaften, Universität Konstanz - 1997

We derive a class of utility functions that are equivalent with respect to a well-defined functional form. We apply a general view of constant relative risk aversion to investigate on different equivalence relations. Then we compare our results with standard applications in economics and finance.

Persistent link: https://www.econbiz.de/10010958408

Risk Appetite

Berlinger, Edina; Váradi, Kata - In: Public Finance Quarterly 60 (2015) 1, pp. 49-62

went on to present the main results of behavioural research, with special focus on prospect theory, the correlations …

Persistent link: https://www.econbiz.de/10011251914

The Shape of Utility Functions and Organizational Behavior

Pennings, J.M.E.; Smidts, A. - Erasmus Research Institute of Management (ERIM), ERIM … - 2002

Based on measurements with 332 owner-managers, the global shape of the utility function (i.e., S-shaped versus concave or convex over the total range of outcomes) appears to discriminate organizational behavior. Whereas the degree of risk aversion, based on the local shape of the utility...

Persistent link: https://www.econbiz.de/10005288799

Theorem of existence of ruptures for mean values on finite numerical segments. Discrete case

Harin, Alexander - Volkswirtschaftliche Fakultät, … - 2011

The proof of the theorem of existence of the ruptures, namely the proof of maximality, is improved. The theorem may be used in economics and explain the well-known problems such as Allais’ paradox. Illustrated examples of ruptures are presented.

Persistent link: https://www.econbiz.de/10009403452

The Shape of Utility Functions and Organizational Behavior

Pennings, J.M.E.; Smidts, Smidts, A. - Erasmus Research Institute of Management (ERIM), … - 2002

Persistent link: https://www.econbiz.de/10010837620

New results on the relationship among risk aversion, prudence and temperance

Menegatti, Mario - In: European Journal of Operational Research 232 (2014) 3, pp. 613-617

This note studies the relationships between different aspects of agent’s preferences toward risk. We show that, under the assumptions of non-satiation and bounded marginal utility, prudence implies risk aversion (imprudence implies risk loving) and that temperance implies prudence...

Persistent link: https://www.econbiz.de/10010738172

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