The Standard Model of Rational Risky Decision-Making

Expected utility theory (EUT) is currently the standard framework which formally defines rational decision-making under risky conditions. EUT uses a theoretical device called von Neumann–Morgenstern utility function, where concepts of function and random variable are employed in their pre-set-theore...

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Bibliographic Details
Main Author: Kazem Falahati
Format: Article
Language:English
Published: MDPI AG 2021-04-01
Series:Journal of Risk and Financial Management
Subjects:
D01
D81
Online Access:https://www.mdpi.com/1911-8074/14/4/158