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Exact capacities and star shaped distorted probabilities

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Author Info
Zaier Aouani () (CERMSEM)

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Abstract

We are interested in this work, in capacities which are deformations of probability i.e. v = f o P, we characterize respectively balanced, totally balanced, exact and convex capacities by properties concerning the probability transformation function f. And we give the explicit expression, in the case of a convex capacity v = f o P, of a probability in the core of v which coincides with v on a given finite chain of elements of the algebra A. We end this work by two notions of increase in risk recently studied in [4] and connected with star-shaped functions and with an application to the optimality of the deductible insurance studied in [14].

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File URL: ftp://mse.univ-paris1.fr/pub/mse/cahiers2004/B04117.pdf
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Publisher Info
Paper provided by Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number b04117.

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Length: 24 pages
Date of creation: Dec 2004
Date of revision:
Handle: RePEc:mse:wpsorb:b04117

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Related research
Keywords: Cooperative game; capacity; balanced; exact; core; increase in risk.;

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Find related papers by JEL classification:
C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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References listed on IDEAS
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  1. Itzhak Gilboa & David Schmeidler, 1992. "Canonical Representation of Set Functions," Discussion Papers 986, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  2. Chateauneuf, Alain, 1991. "On the use of capacities in modeling uncertainty aversion and risk aversion," Journal of Mathematical Economics, Elsevier, vol. 20(4), pages 343-369. [Downloadable!] (restricted)
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