Choice Theory: A Very Short Introduction (Very Short Introductions) by Michael Allingham

Author:Michael Allingham [Allingham, Michael]
Language: eng
Format: mobi, epub
Publisher: Oxford University Press
Published: 2002-08-21T16:00:00+00:00

This is illustrated in the figure, in which your present wealth is at A. The horse gamble would result in your wealth being either at B or at C and your expected utility being directly above your utility at A so you take it. The new insurance gamble would result in your wealth being either at D or at E and your expected utility being directly below your utility at A so you do not take it, that is, you insure.

11. Gambling and insuring: if your wealth is at A you would accept the fair gamble which would result in your wealth being either at B or at C but reject that which would result in your wealth being at either D or at E

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.