Volltext-Downloads (blau) und Frontdoor-Views (grau)

Expected utility of final wealth and the Rabin anomaly

  • This short note aims to show that Rabin’s anomaly can be avoided while remaining within the bounds of the final-wealth, expected utility approach, if the hypothesis of risk aversion over monetary amounts is replaced by the assumption of risk aversion over subjective consequences. We argue that the assumption of monetary risk aversion may return unrealistic predictions in specific decision contexts, or in the presence of large stakes.

Export metadata

Additional Services

Search Google Scholar


Document Type:Working Paper
Author:Pierfrancesco La MuraORCiD
Chairs and Professorships:Chair of Economics and Information Systems
Year of Completion:2009
HHL Working Paper 91. HHL - Leipzig Graduate School of Management, 2009