:: Volume 25, Issue 2 (3-2021) ::
Andishe 2021, 25(2): 41-53 Back to browse issues page
A Study on Preference Orderings of Mathematical expectation, Expected Utility and Distorted Expectation
Sirous Fathi Manesh * , Muhyiddin Izadi , Baha-Eldin Khaledi
University of Kurdistan
Abstract:   (2098 Views)

One of the challenges for decision-makers in insurance and finance is choosing the appropriate criteria for making decisions. Mathematical expectation, expected utility, and distorted expectation are the three most common measures in this area. In this article, we study these three criteria, and by providing some examples, we review and compare the decisions made by each measure.

Keywords: Allais paradox, distortion function, St. Petersburg paradox, utility function, ‎‎‎‎‎‎.
Full-Text [PDF 307 kb]   (1575 Downloads)    
Type of Study: Research | Subject: Special
Received: 2021/01/11 | Accepted: 2021/03/17 | Published: 2021/03/18


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Volume 25, Issue 2 (3-2021) Back to browse issues page