Austrian economists differ with the economic mainstream in many ways, but the break on utility theory is especially critical ...

Smooth ambiguity preferences (Klibanoff, Marinacci, and Mukerji (2005)) describe a decision maker who evaluates each act f according to the twofold expectation V(f) = ∫pϕ(∫Ωu(f)dp)dμ(p) defined by a ...

When survival over generations is the end game, researchers say it makes sense to undervalue long shots that could be profitable and overestimate the likelihood of rare bad outcomes. Making decisions ...

Asset allocation with a derivative security is studied in a hidden, Markovian regimeswitching, economy using filtering theory and the martingale approach. A generalized delta-hedged ratio and a ...