Monetary Services Aggregation under Uncertainty: A Behavioral Economics Extension Using Choquet Expectation

William Barnett, Han Qing and Zhang Jianbo

MPRA Paper from University Library of Munich, Germany

Abstract: A central tenet of behavioral economics is that the axioms producing expected utility maximization by consumers are too strong to be descriptive of rational behavior. The existing theory of monetary services aggregation under risk assume expected utility maximization. We extend those results to uncertainty under weaker axiomatic assumptions by using Choquet expectations. Choquet integration reduces to Riemann integration as a special case under the stronger assumption of additive probability measure, not accepted in the literature on behavioral economics. Our theoretical results on monetary services aggregation are generalizations of prior results, nested as special cases of our results under stronger behavioral assumptions.

Keywords: Uncertainty Aversion; User Cost; Choquet Expectation; Monetary Aggregation (search for similar items in EconPapers)
JEL-codes: C43 E41 G12 (search for similar items in EconPapers)
Date: 2018-07-30
New Economics Papers: this item is included in nep-evo, nep-mac and nep-upt
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https://mpra.ub.uni-muenchen.de/88261/1/MPRA_paper_88261.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/88320/8/MPRA_paper_88320.pdf revised version (application/pdf)

Related works:
Journal Article: Monetary services aggregation under uncertainty: A behavioral economics extension using Choquet expectation (2021)
Working Paper: Monetary Services Aggregation under Uncertainty: A Behavioral Economics Extension Using Choquet Expectation (2018)
Working Paper: Monetary Services Aggregation Under Uncertainty: A Behavioral Economics Extension Using Choquet Expectation (2018)
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