An axiomatic account of status quo-dependent non-expected utility: pragmatic constraints on rational choice under risk (Q2427205)

Some aspects of decision analysis are investigated, focusing on the causes of the variability of attitudes toward risk. The analysis tries to frame the utility-oriented decision making within a specific context, including the decision maker's aspirations, uncertainties of current wealth and income (status quo), as well as the dependence of risk attitudes on background risks. After an overview of the axiomatic basis, an utility representation of preferences is proved. Finally discussions and applications are provided.