Utility theory and participation in unfair lotteries

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Please use this identifier to cite or link to this item: http://hdl.handle.net/11718/7312

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DC Field	Value	Language
dc.contributor.author	Patel, Nitin R.
dc.contributor.author	Subramanyam, Marti G.
dc.date.accessioned	2010-08-12T05:55:23Z
dc.date.available	2010-08-12T05:55:23Z
dc.date.copyright	1978-12
dc.date.issued	1978-12-12T05:55:23Z
dc.identifier.citation	Journal of Economic Theory, Vol. 19, No. 2, December 1978, pp. 555-56	en
dc.identifier.uri	http://hdl.handle.net/11718/7312
dc.description.abstract	Since the development of the expected utility maxim by von Neumann and Morgenstern [2], attempts have been made to provide a rational explanation for the observed behavior of individuals under uncertainty. One aspect of such behavior which will concern us in the paper is the willingness of an individual to purchase insurance and lottery tickets. In this connection it has been pointed out that there is an inconsistency between the usual assumption of risk aversion by individuals and their participation in fair and even unfair lotteries. A fair lottery will never be undertaken by an individual with a concave utility function for wealth which implies risk aversion. However, the purchase of insurance is consistent with such a utility function.
dc.language.iso	en	en
dc.title	Utility theory and participation in unfair lotteries	en
dc.type	Article	en
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