Risk Aversion and a Calculus for Finitely Generated Piecewise Linear Functions: A Calculus that Economists Ought to Develop?

• Autorzy: Somdeb Lahiri
• Języki publikacji: EN

Abstrakty

EN

In this note we propose a calculus for piece-wise linear functions, in order to obtain derivatives and second derivatives at points where the function is not differentiable. Such derivatives can be used to calculate coefficients of risk aversion at initial wealth for piece-wise linear utility functions for gains, which display loss aversion-and hence non differentiability at zero gains. (original abstract)

Słowa kluczowe

EN

Linear models; Derivative; Utility functions; Loss aversion

PL

Modele liniowe; Pochodna; Funkcja użyteczności; Awersja do strat

• Czasopismo: Metody Ilościowe w Badaniach Ekonomicznych / Szkoła Główna Gospodarstwa Wiejskiego
• Rocznik: 2022
• Tom: 23(XXIII)
• Numer: nr 1
• Strony: 1--10

Twórcy

autor

Somdeb Lahiri

• Pandit Deendayal Energy University, Gujarat, India

Bibliografia

• Arrow K. J. (1963) Liquidity preference. Lecture VI [in] Lecture Notes for Economics, 285, The Economics of Uncertainty, 33-53, Stanford University.
• Eeckhoudt L., Gollier C., Schlesinger H. (2005) Economic and Financial Decisions Under Risk. Princeton University Press, NJ.
• de Finetti B. (1952) Sulla preferibilita. Giornale Degli Economisti E Annali Di Economia,11, 685-709.
• Kemeny J. G., Snell J. L., Thompson G. L. (1957) Introduction to Finite Mathematics (Third Edition, 1974). Prentice-Hall, Inc., Englewood Cliffs, N. J. Pratt J. (1964) Risk Aversion in the Small and in the Large. Econometrica, 32(1/2), 122-136.
• Ross S. A. (1981) Some Stronger Measures of Risk Aversion in the Small and in the Large with Applications. Econometrica, 49(3), 621-638.
• Stanley W. D. (2004) Technical Analysis and Applications With Matlab. Cengage Learning.

Identyfikatory

DOI

https://doi.org/10.22630/MIBE.2022.23.1.1