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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
766
To formally describe the Ergin-Gul representation, note that exploiting the product
structure of the state space allows an act f to be represented as
where {A
1
,…,A
n
} is a partition of
S
a
, {B
1
, ..., B
m
}
is a partition of
S
b
, and x
ij
is the
prize delivered by f at all states s A
i
×B
j
. Given a product measure μ = μ
a
× μ
b
on
S
, associate with f the two-stage compound lottery
Under Ergin and Gul’s axioms, there exists a unique product measure μ = μ
a
×
μ
b
on
S
such that every act f is evaluated according to W ( f(·)) = V
*
(P
f
*
), where P
f
*
is the compound lottery associated with f and V
*
is a suitably contin ...
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Publisher Resources

ISBN: 9780444536853