We introduce a representation theory for risk operations on locally compact groups in a partition of unity on a topological manifold for Markowitz-Tversky-Kahneman (MTK) reference points. We identify (1) risk torsion induced by the flip rate for risk averse and risk seeking behavior, and (2) a...

The new issues market is used to examine the impact of ambiguity and ambiguity aversion on the pricing of financial assets. An IPO process is modeled assuming ambiguity regarding the returns on financial assets and risk and ambiguity aversion on the part of agents. Theoretically, the underwriter...

We consider a standard one-agent decision-making problem under risk and we address the following question: under what conditions is utility maximization equivalent to 'risk' minimization, where the measure of risk used by the decision-maker is a conservative coherent risk measure?

A formula is derived for the social cost of carbon (SCC) that takes account of intragenerational income inequality and its evolution with economic growth. The social discount rate (SDR) should be adjusted to account for intragenerational and intergenerational inequality aversion and for risk...