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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
Mark J. Machina and Marciano Siniscalchi
764
The main attraction of the Smooth Ambiguity Preferences model is its tractability.
The numerical example above suggests that calculations may involve simple adapta-
tions of familiar expected utility analysis. As further evidence, KMM show that con-
cavity of the second-order utility function φ(·) corresponds to a notion of “ambiguity
aversion” which implies Schmeidler’s Uncertainty Aversion Axiom (although their
notion is defined in terms of second-order beliefs, and hence subject to the preceding
qualifications).
13.5.5 Ergin and Gul’s Issue-Preference Model
Ergin and Gul (2009) propose a variant of ...
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Publisher Resources

ISBN: 9780444536853