Dual approaches to the analysis of risk aversion
AbstractDual approaches have proved their value in many areas of economic analysis. Until recently, however, they have been virtually ignored in the analysis of choice under uncertainty.In this paper, we present a dual formulation of choice under uncertainty based on a few simple assumptions about preferences, namely, continuity, monotonicity and convexity of preference sets. Particular emphasis is given to showing that the additive separability restriction, key to expected-utility theory, on preferences can be dropped with little loss of analytic power for a broad class of choice problems.
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Bibliographic InfoPaper provided by University of Queensland, School of Economics in its series Risk and Sustainable Management Group Working Papers with number 151175.
Date of creation: 15 Jun 2006
Date of revision:
Risk and uncertainty; Risk and Uncertainty; D81;
Other versions of this item:
- Chambers, Robert G. & Quiggin, John C., 2002. "Dual Approaches To The Analysis Of Risk Aversion," Working Papers 28606, University of Maryland, Department of Agricultural and Resource Economics.
- Robert G. Chambers & John Quiggin, 2006. "Dual Approaches to the Analysis of Risk Aversion," Risk & Uncertainty Working Papers WPR06_1, Risk and Sustainable Management Group, University of Queensland.
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
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