Stronger utility
type: Item
instance of: scholarly article
title: Stronger utility
zbMATH Open document ID: 1293.91064
author: Pavlo R. Blavatskyy
published in: Theory and Decision
publication date: 2014-06-18T00:00:00Z
review text: The topic of the article is related to converting deterministic economic theory into an econometric model. The author considers the commonly used method to add a random error term on the utility scale and proposes a modification of this method to account for stochastic dominance. The modified model is compared to other existing models in terms of goodness of fit to experimental data. The proposed model can also rationalize the preference reversal phenomenon. A simple axiomatization of the model is presented. The macroeconomic concept of risk aversion is defined in the model which admits not only estimating risk attitudes but also producing results that have standard microeconomic interpretation.
reviewed by: Pavel Stoynov
Mathematics Subject Classification ID: 91B16
Mathematics Subject Classification ID: 91B06
Mathematics Subject Classification ID: 62C05
zbMATH DE Number: 6305084
zbMATH Keywords: decision theory
zbMATH Keywords: probabilistic choice
zbMATH Keywords: stochastic dominance
zbMATH Keywords: strong utility
zbMATH Keywords: risk aversion
zbMATH Keywords: preference reversal phenomenon
MaRDI profile type: Publication
full work available at URL: s11238-013-9366-3
OpenAlex ID: W3192654268
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DOI: 10.1007/S11238-013-9366-3
description: scientific article; zbMATH DE number 6305084