Distorted Probabilities and Choice Under Risk (Paperback)

1 Axiomatic Utility Theory under Risk.- 1.1 Historical Overview.- 1.2 The Axiomatic Basis of Expected Utility Theory.- 1.3 The Empirical Evidence against the Independence Axiom.- 1.4 Non-Linear Utility Theory under Risk.- 1.4.1 Weighted Linear Utility Theory.- 1.4.2 Theories with the Betweenness Property.- 1.4.3 Anticipated Utility Theory.- 1.4.4 The Dual Theory.- 1.4.5 The General Rank-Dependent Utility Model.- 1.4.6 Implicit Rank-Linear Utility Theory.- 2 A Rank-Dependent Utility Model with Prize-Dependent Distortion of Probabilities.- 2.1 Rank-Dependent Utility Theory Reconsidered.- 2.1.1 The Generalized Utility Function.- 2.1.2 Absolute Continuity.- 2.1.3 The Set of Elementary Lotteries.- 2.2 Homogeneity on Elementary Lotteries.- 2.2.1 The Common Ratio Effect.- 2.2.2 The Allais Paradox.- 2.3 Further Evidence for Prize-Dependent Distortions of Probabilities.- 2.4 A Characterization Theorem.- 2.5 Rank-Dependent Utility Theory and Relative Utility.- 2.6 A Generalized Model.- 3 Risk Aversion.- 3.1 Risk Aversion in the General Rank-Dependent Utility Model.- 3.2 Risk Aversion and Homogeneity.- 3.3 Decreasing Risk Aversion.- 3.4 The Friedman-Savage Hypothesis.- Conclusion.- References.