The new models of decision in risk: A review of the critical literature
Mohamed Ali Trabelsi
MPRA Paper from University Library of Munich, Germany
The aim of the risk decision theory is to describe the behavior of agents in the face of several random prospects. Since it is difficult to describe these preferences, we seek to represent them. The use of a representative function of preferences has been for a long time, the usual method of describing behavior in a random context. The obvious advantage of this method is that it allows including these data in a formalized model and, by extension, to understand the optimization process underlying any decision. The determination of the representative function of preferences must be based on an axiomatic basis. From these axioms, an accurate specification of the value function will be derived. The purpose of this article is to examine the history of theories that have sought to determine a satisfactory criterion for responding to the risk decision problem and to analyze the contribution of these models.
Keywords: Risk Aversion; Expected Utility (EU); Rank Dependent Expected Utility (RDEU); Gamble (search for similar items in EconPapers)
JEL-codes: C91 D81 (search for similar items in EconPapers)
Date: 2019, Revised 2019
New Economics Papers: this item is included in nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/92693/1/MPRA_paper_92693.pdf original version (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:92693
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().