If we study the expected utility function then we deal with a unified approach to an integrated formulation of decision theory in its two subjective components: utility and probability. We decompose the expected utility function inside of an m-dimensional linear space after decomposing a contingent consumption plan viewed as a univariate random quantity. We propose a condition of coherence compatible with all possible attitudes in the face of risk of a consumer. It is a geometric condition of coherence. In particular, we consider a risk-neutral consumer and his coherent decisions under uncertainty. The right closed structure in order to deal with utility and probability is a linear space in which we study coherent decisions under uncertainty having as their goal the maximization of the prevision of the utility associated with a contingent consumption plan.

A risk-neutral consumer and his coherent decisions under uncertainty: a methodological analysis / Angelini, Pierpaolo. - In: INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCE. - ISSN 1916-9728. - (2020).

A risk-neutral consumer and his coherent decisions under uncertainty: a methodological analysis

pierpaolo angelini
2020

Abstract

If we study the expected utility function then we deal with a unified approach to an integrated formulation of decision theory in its two subjective components: utility and probability. We decompose the expected utility function inside of an m-dimensional linear space after decomposing a contingent consumption plan viewed as a univariate random quantity. We propose a condition of coherence compatible with all possible attitudes in the face of risk of a consumer. It is a geometric condition of coherence. In particular, we consider a risk-neutral consumer and his coherent decisions under uncertainty. The right closed structure in order to deal with utility and probability is a linear space in which we study coherent decisions under uncertainty having as their goal the maximization of the prevision of the utility associated with a contingent consumption plan.
2020
expected utility function; random process; direct and orthogonal sum; contingent consumption plan
01 Pubblicazione su rivista::01a Articolo in rivista
A risk-neutral consumer and his coherent decisions under uncertainty: a methodological analysis / Angelini, Pierpaolo. - In: INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCE. - ISSN 1916-9728. - (2020).
File allegati a questo prodotto
File Dimensione Formato  
Angelini_risk-neutral_2020.pdf

accesso aperto

Tipologia: Documento in Post-print (versione successiva alla peer review e accettata per la pubblicazione)
Licenza: Creative commons
Dimensione 125.59 kB
Formato Adobe PDF
125.59 kB Adobe PDF

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11573/1429469
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact