Logo
Munich Personal RePEc Archive

An existence theorem for bounds (restrictions) on the expectation of a random variable. Its opportunities for utility and prospect theories

Harin, Alexander (2015): An existence theorem for bounds (restrictions) on the expectation of a random variable. Its opportunities for utility and prospect theories.

[thumbnail of MPRA_paper_66692.pdf]
Preview
PDF
MPRA_paper_66692.pdf

Download (255kB) | Preview

Abstract

An existence theorem is proved for the case of a discrete random variable with finite support. If the random variable takes on values in a finite interval and there is a lower non-zero bound on its dispersion, then non-zero bounds (or non-zero “forbidden zones”) on its expectation exist near the borders of the interval. The theorem can be used in utility and prospect theories, in particular, in the analysis of Prelec’s probability weighting function.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.