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Handbook of the Economics of Risk and Uncertainty
book

Handbook of the Economics of Risk and Uncertainty

by Mark Machina, W. Kip Viscusi
November 2013
Beginner content levelBeginner
896 pages
35h 10m
English
North Holland
Content preview from Handbook of the Economics of Risk and Uncertainty
Axiomatic Foundations of Expected Utility and Subjective Probability
3
the principles underlying the expected utility criterion and that subjective probabilities
can be inferred from observing this behavior. The normative interpretation presumes
that the principles underlying the expected utility criterion are basic tenets of rational
choice and that rational choice implies, among others, the possibility of quantifying
beliefs by probabilities.
The positive interpretation is an hypothesis about choice behavior, which, like other
scientific theories, has testable implications. By contrast, the normative interpretation
maintains that there are pr ...
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Publisher Resources

ISBN: 9780444536853