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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
John Quiggin
704
considers the economic implications of generalized EU theories. Finally, some conclud-
ing comments are presented.
12.2 THE EU MODEL
In a standard problem of choice under risk, the objects of choice are simple lot-
teries
p =
x
1
...x
N
;p
1
...p
N
over some finite set of prizes
x
n
X , n = 1 ...N
for some output space X. The probability of receiving x
n
is given by the probability
p
n
,0 p
n
1,
n
p
n
=
1
. The set of all such lotteries is denoted P and preferences over
P are represented by an ordering
with associated indifference relation ~ and strict
ordering. More generally, we may consider cumulative probability distribution functions ...
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Publisher Resources

ISBN: 9780444536853