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Chapter 4 - Risk

from Part II - Risk and Learning

Published online by Cambridge University Press:  14 January 2025

Tomasz Strzalecki
Tomasz Strzalecki
Affiliation:
Harvard University, Massachusetts
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Summary

How do people choose between risky prospects? I discuss the model of random expected utility and its axiomatic characterization. Other models are discussed too, including models of nonexpected utility and models with additive shocks.

Keywords

expected utilityrandom expected utilityGul–Pesendorfercomparative statics
Type
Chapter
Information
Stochastic Choice Theory , pp. 47 - 61
Publisher: Cambridge University Press
Print publication year: 2025

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  • Risk
  • Tomasz Strzalecki, Harvard University, Massachusetts
  • Book: Stochastic Choice Theory
  • Online publication: 14 January 2025
  • Chapter DOI: https://doi.org/10.1017/9781009512749.007
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  • Risk
  • Tomasz Strzalecki, Harvard University, Massachusetts
  • Book: Stochastic Choice Theory
  • Online publication: 14 January 2025
  • Chapter DOI: https://doi.org/10.1017/9781009512749.007
Available formats
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Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

  • Risk
  • Tomasz Strzalecki, Harvard University, Massachusetts
  • Book: Stochastic Choice Theory
  • Online publication: 14 January 2025
  • Chapter DOI: https://doi.org/10.1017/9781009512749.007
Available formats
×