The Effects of Risk on Decision Making | SpringerLink

If u(x) and v(x) are not the same, we argue that exploring the relationship between them may be a fruitful means of gaining insights regarding how risks effect ... Skiptomaincontent Advertisement SearchSpringerLink Search AbstractAfundamentalassumptionofclassicaldecisiontheoryisthatanindividual’sattitudetowardtherisksinvolvedinchoicesamonguncertainalternativescanbecapturedbytheshapeofhisutilityfunctionu(x)(e.g.,seePratt(1964)).Ameasurablevaluefunctionv(x)canalsobedefinedforthissameindividualoverthesamecriteriontomeasurehisstrengthofpreferenceforincrementalchangesinthelevelofthecriterion.Theshapeofthismeasurablevaluefunctioncanbeinterpretedasrevealingthemarginalvalueofadditionalunitsofthecriterion.Ingeneral,thereisnocompellingreasontoassumethatu(x)=v(x)forthesamedecisionmaker,asdiscussedbySarin(1982).Ifu(x)andv(x)arenotthesame,wearguethatexploringtherelationshipbetweenthemmaybeafruitfulmeansofgaininginsightsregardinghowriskseffectthepreferences,andultimatelythechoicebehavior,ofindividuals.KeywordsUtilityFunctionRiskAversionRiskAttitudeProspectTheoryRelativeRiskAversionThesekeywordswereaddedbymachineandnotbytheauthors.Thisprocessisexperimentalandthekeywordsmaybeupdatedasthelearningalgorithmimproves. 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In:Karpak,B.,Zionts,S.(eds)MultipleCriteriaDecisionMakingandRiskAnalysisUsingMicrocomputers.NATOASISeries,vol56.Springer,Berlin,Heidelberg.https://doi.org/10.1007/978-3-642-74919-3_3Downloadcitation.RIS.ENW.BIBDOI:https://doi.org/10.1007/978-3-642-74919-3_3 PublisherName:Springer,Berlin,Heidelberg PrintISBN:978-3-642-74921-6 OnlineISBN:978-3-642-74919-3eBookPackages:SpringerBookArchiveSharethispaperAnyoneyousharethefollowinglinkwithwillbeabletoreadthiscontent:GetshareablelinkSorry,ashareablelinkisnotcurrentlyavailableforthisarticle.Copytoclipboard ProvidedbytheSpringerNatureSharedItcontent-sharinginitiative Buyingoptions Chapter EUR 24.95 PriceexcludesVAT(Singapore) DOI:10.1007/978-3-642-74919-3_3 Chapterlength:20pages InstantPDFdownload Readableonalldevices Ownitforever Exclusiveofferforindividualsonly Taxcalculationwillbefinalisedduringcheckout BuyChapter eBook EUR 149.79 PriceincludesVAT(Singapore) ISBN:978-3-642-74919-3 InstantPDFdownload Readableonalldevices Ownitforever Exclusiveofferforindividualsonly Taxcalculationwillbefinalisedduringcheckout BuyeBook SoftcoverBook EUR 179.99 PriceexcludesVAT(Singapore) ISBN:978-3-642-74921-6 Dispatchedin3to5businessdays Exclusiveofferforindividualsonly FreeshippingworldwideShippingrestrictionsmayapply,checktoseeifyouareimpacted. 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