Simon Grant, Monti, Martin Osherson, Daniel

A Note on Concave Utility Functions
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A Note on Concave Utility Functions: Rice U

Working Papers from Rice University, Department of Economics

Abstract: The classical theory of preference among monetary bets represents people as expected utility maximizers with nondecreasing concave utility functions. Critics of this account often rely on assumptions about preferences over wide ranges of total wealth. We derive a prediction of the theory that bears on bets at any fixed level of wealth, and test the prediction behaviorally. Our results are discrepant with the classical account. Competing theories are also examined in light of our data.

JEL-codes: C91 (search for similar items in EconPapers)
Date: 2004-04
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:riceco:2003-13

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