Risk Perception And The Analysis Of Risk Attitudes
AbstractRisk has long been recognised as an important feature of the environment facing farmers. In recent years the von Neumann-Morgenstern expected utility theory has been used to analyse decision making under risk. However, many people behave in a manner inconsistent with the expected utility theory. One widely suggested explanation is based on subjective probability distortion. A number of attempts to incorporate this phenomenon into utility theories have been made. In this paper, the problems of analysing subjective probability distortion are discussed. Evidence from a survey of farmers' risk attitudes undertaken in conjunction with the 1977 BAE Australian Agricultural and Grazing Industries Survey is analysed in the light of this discussion.
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Bibliographic InfoArticle provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural Economics.
Volume (Year): 25 (1981)
Issue (Month): 02 (August)
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Risk and Uncertainty;
Other versions of this item:
- John Quiggin, 1981. "Risk Perception And The Analysis Of Risk Attitudes," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 25(2), pages 160-169, 08.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dillon, John L., 1971. "An Expository Review of Bernoullian Decision Theory in Agriculture: Is Utility Futility?," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 39(01), March.
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- Kahneman, Daniel & Tversky, Amos, 1979.
"Prospect Theory: An Analysis of Decision under Risk,"
Econometric Society, vol. 47(2), pages 263-91, March.
- Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
- Milton Friedman & L. J. Savage, 1948. "The Utility Analysis of Choices Involving Risk," Journal of Political Economy, University of Chicago Press, vol. 56, pages 279.
- James C. Cox & Vjollca Sadiraj & Ulrich Schmidt, 2011.
"Paradoxes and Mechanisms for Choice under Risk,"
Experimental Economics Center Working Paper Series
2011-07, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University, revised May 2012.
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