A non-zero dispersion leads to the non-zero bias of mean
AbstractA theorem of existence of the non-zero restrictions for the mean of a function on a finite numerical segment at a non-zero dispersion of the function is proved. The theorem has an applied character. It is aimed to be used in the probability theory and statistics and further in economics. Its ultimate aim is to help to answer the Aczél-Luce question whether W(1)=1 and to explain, at least partially, the well-known problems and paradoxes of the utility theory, such as the underweighting of high and the overweighting of low probabilities, the Allais paradox, the four-fold pattern paradox, etc., by purely mathematical methods.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 47559.
Date of creation: 11 Jun 2013
Date of revision:
utility; utility theory; probability; uncertainty; decisions; economics; Prelec; probability weighting; Allais paradox; risk aversion;
Find related papers by JEL classification:
- C0 - Mathematical and Quantitative Methods - - General
- C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
- C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
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