Utility of a quarter-million

Pavlo R. Blavatskyy

Economics Letters, 2012, vol. 117, issue 3, 650-653

Abstract: This paper presents a new method how to elicit the Bernoulli utility function over a wide range of monetary outcomes using approximation through Taylor expansion. The new method is applied to the natural experiment provided by the Swiss version of the television show Deal or No Deal.

Keywords: Expected utility theory; Bernoulli utility function; Taylor expansion; Risk aversion; Markowitz utility (search for similar items in EconPapers)
JEL-codes: C93 D81 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:117:y:2012:i:3:p:650-653

DOI: 10.1016/j.econlet.2012.08.011

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