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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 D. Hey
848
• ProspectiveReferencetheory(Viscusi, 1989)
where c
i
= 1/n(p) if p
i
> 0 and 0 otherwise, and n(p) is the number of nonzero elements in p.
• QuadraticUtility(Chew et al., 1991)
where ψ(x
i
,x
j
) = ψ(x
j
,x
i
) for all i, j and we normalize so that ψ(x
1
,x
1
) = 0.
• Regrettheorywithdependence(Loomes and Sugden, 1982).
This can only be used to compare two gambles p and q. The preferred gamble is
indicated by the value of the expression below:
where z is a rather complicated function of p and q and ψ
ij
= ψ(x
i
,x
j
). For details see
Hey and Orme (1994).
• Regrettheorywithindependence(Loomes and Sugden, 1982).
This is where the z tak
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Publisher Resources

ISBN: 9780444536853