Risk attitude under random utility (Q1123842)
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scientific article
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English | Risk attitude under random utility |
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Risk attitude under random utility (English)
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1989
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The article develops several alternative definitions of risk attitude for those whose choice behaviour under uncertainty is characterized by a random utility model, in which subjective utility values undergo random fluctuations and the alternative with the greatest utility at the instant of choice is selected. Four alternative definitions of risk attitude and comparative risk aversion have been developed, on considering individuals whose choice behaviour under uncertainty can be represented by a random expected- utility model. These definitions provide a vehicle for conceptualizing what risk attitude means, under random utility. The concepts provide a means for empirically assessing the risk attitudes and comparative levels of a risk aversion reflected in choice data collected from individuals whose choice behaviour is subjected to inconsistencies due to random utility.
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choice behaviour under uncertainty
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random utility model
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subjective utility values
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comparative risk aversion
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random expected-utility model
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