Development of a Weighted Additive Model for Certainty Equivalents of Binary Gambles that are Decomposed into Risky and Sure Parts

In the sense that binary bets are divided into safe bets and hazardous bets, this chapter offers a weighted additive model for the certainty equivalents of these bets. Weight is used to assess the impact of combining the choice for a safe investment with the sure reward. First, the addition of a specified gain and a conditional certainty equivalent is used to decompose each gamble’s certainty equivalent. In order to describe the conditional certainty equivalent as a multiplicative form by weight, two more criteria are added.

Author(s) Details:

Yutaka Matsushita,
Kanazawa Institute of Technology, 3-1, Yatsukaho, Hakusan, Ishikawa – 924-0838, Japan.

Please see the link here:

Keywords: Segregation, certainty equivalent, utility of gambling, risk attitude

Leave a Reply

Your email address will not be published.

Previous post Energy Self-sufficiency through Renewables with Endogenous Investment in R&D: The Role of Central Authority
Next post Energy Crisis vs. Energy Self-Sufficiency: Optimal Policy with Firms Investment Behavior