Comparative Statics for Rank-Dependent Expected Utility Theory.

B-Tier
Journal: Journal of Risk and Uncertainty
Year: 1991
Volume: 4
Issue: 4
Pages: 339-50

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Recently, a number of generalizations of the expected utility (EU) model have been proposed. In order to make such generalizations useful, it is necessary that they should yield sharp comparative static results, like those obtained using EU theory. In this article, rank dependent expected utility (RDEU) theory, a generalization of EU theory based on the concept of probability weighting, is examined. A number of methods of extending results from EU to RDEU are considered. It is shown that a major class of comparative static results can be extended to the RDEU model, but not to the case of general smooth preferences. This is because RDEU maintains the separation between probabilities and utilities that is abandoned in the general case. Copyright 1991 by Kluwer Academic Publishers

Technical Details

RePEc Handle
repec:kap:jrisku:v:4:y:1991:i:4:p:339-50
Journal Field
Theory
Author Count
1
Added to Database
2026-01-29