Relative Wealth and Risk Taking: A Short Note on the Friedman-Savage Utility Function

1980 ◽  
Vol 88 (6) ◽  
pp. 1226-1230 ◽  
Author(s):  
Nathaniel Gregory
Keyword(s):  
Utility Function ◽  
Risk Taking ◽  
Short Note ◽  
Relative Wealth

scholarly journals Relative Wealth Concerns, Executive Compensation, and Systemic Risk-Taking

2016 ◽  
Vol 2016 (1164) ◽  
pp. 1-43 ◽  
Author(s):  
Qi Liu ◽  
◽  
Bo Sun
Keyword(s):  
Executive Compensation ◽  
Risk Taking ◽  
Systemic Risk ◽  
Relative Wealth

scholarly journals A rationalist explanation of Russian risk-taking

2016 ◽  
Vol 11 (1) ◽  
Author(s):  
Frank Lehrbass ◽  
Valentin Weinhold
Keyword(s):  
Utility Function ◽  
Expected Utility ◽  
Risk Taking ◽  
Utility Maximization ◽  
Strictly Convex ◽  
Forward Market ◽  
Expected Utility Maximization ◽  
Russian Politics ◽  
Open Position

Three seemingly unrelated topics of Russian politics are investigated. It is shown that under expected utility maximization the assumptions of an unbiased oil forward market and a risk-acceptant attitude (strictly convex utility function) are sufficient to explain Russia’s open position in oil and the bailout of Rosneft. The risk-acceptant attitude of the Russian leader also causes a shrunken bargaining range for the conflict in Ukraine, which can be enlarged by sanctions but not necessarily by the proliferation of weapons. This gives sanctions a clear edge over the proliferation of weapons.

Relative Wealth Placement and Risk-Taking Behavior

2019 ◽  
Author(s):  
Marc-Andre Hillebrandt
Keyword(s):  
Risk Taking ◽  
Relative Wealth ◽  
Risk Taking Behavior

Relative Wealth and Risk Taking

2021 ◽  
Author(s):  
Dietmar Fehr
Keyword(s):  
Risk Taking ◽  
Relative Wealth

Relative Wealth and Risk Taking

2021 ◽  
Author(s):  
Dietmar Fehr
Keyword(s):  
Risk Taking ◽  
Relative Wealth

Sunflower management and life insurance: modeling the CEO’s utility function

2019 ◽  
Vol 11 (3) ◽  
pp. 309-323
Author(s):  
Jyh-Horng Lin ◽  
Fu-Wei Huang ◽  
Shi Chen
Keyword(s):  
Utility Function ◽  
Life Insurance ◽  
Risk Taking ◽  
Limited Liability ◽  
Chief Executive ◽  
Insurance Company ◽  
Life Insurance Company ◽  
Content Type ◽  
Loan Rate ◽  
Interest Margin

Purpose The purpose of this paper is to develop a theoretical framework to answer the following question: What are the consequences of sunflower behavior as well as spread behavior for how asset-liability management is administrated in a life insurance company? Design/methodology/approach This paper takes into account the following: the chief executive officer (CEO) of a life insurance company confirms the board of directors’ belief – the preference of the like of higher return relative to the dislike of higher risk; the authors call such behavior sunflower management; the life insurance policyholder is entitled to a guaranteed interest rate and a participation percentage of the company’s investment surplus; and the authors examine the optimal insurer interest margin, i.e., the spread between the loan rate and the guaranteed rate. Findings Sunflower management translates into lower utility for the CEO and makes the CEO more prudent to risk-taking at an increased insurer interest margin for the provision of life insurance contracts. The effect of the guaranteed rate on the margin is ambiguous and depends on the level of guarantee itself. An increase in the participation level decreases the CEO’s loan risk-taking at an increased margin. It is shown that a trend toward higher return like of the board’s belief produces a corresponding trend toward the CEO’s decreasing risk-taking when the return like is revealed strongly. The results indicate that sunflower management as such is an important determinant in ensuring a safe insurance system. Originality/value This is the first paper to construct a contingent claim model to evaluate the expected value of the CEO’s utility function defined in terms of the equity returns and the equity risks of a life insurance company. The model explicitly considers CEO sunflower behavior, CEO spread behavior and the limited liability of shareholders.

Relative Wealth Placement and Risk-Taking Behavior

2019 ◽  
Author(s):  
Marc-Andre Hillebrandt
Keyword(s):  
Risk Taking ◽  
Relative Wealth ◽  
Risk Taking Behavior

Relative Wealth Placement and Risk-Taking Behavior

2019 ◽  
Author(s):  
Marc-Andre Hillebrandt
Keyword(s):  
Risk Taking ◽  
Relative Wealth ◽  
Risk Taking Behavior

scholarly journals Mutual influence definition of high school students’ basic educational dominants and aspiration levels

2020 ◽  
pp. 68-80
Author(s):  
O.M. Reva ◽  
K. А. Androsovych ◽  
S. V. Radetska ◽  
Ye. A. Burdelna
Keyword(s):  
Decision Making ◽  
High School Students ◽  
Utility Function ◽  
Risk Taking ◽  
Function Analysis ◽  
Problem Solution ◽  
Aspiration Level ◽  
Point Scale ◽  
Aspiration Levels ◽  
Characteristic Points

The appearance of synergistic effect in the humanist (by L. Zade definition) educational systems according to known Hegelian law should be accompanied by quantitative and qualitative transformations of certain indicators characterizing the human factors influence on decision making. It is proved that such indicators are basic educatio- nal dominants which determine the attitude towards risk and characterize the motivation to achieve success (risk-- taking) / failure avoidance (risk aversion) and the aspiration level, which is one of personality backbone factors and characterize the self-assessment adequacy. Basic educational dominants are found through the solution of the closed decision-making task by constructing a limited points number (five) and further analysis of the estimated utility function of the 12-point scale continuum. Characteristic points of this function are the so-called determined lottery equivalents with corresponding utility n0,25, n0,5, n0,75.The aspiration levels are found through the open decision-making problem solution by constructing on a formal- ly unlimited number of points and further utility function analysis of the 12-point scale continuum. Characteristic points of the estimation function: n– the education result, which corresponds to the negative jump of usefulness in the imagination of those, who study on the acceptability of a particular level of the scale; n0 — the education result, which corresponds to the transition from a negative to a positive perception ratings of the scale; n* is the learning outcome that corresponds to the maximum positive jump of usefulness in the perception of a certain mark on the scale, which in this case is considered as the aspiration level. The m = 208 ninth-graders set the ratio of people who are vulnerable, indifferent and risk-taking in the proportion: VUL: IND: RT  1: 2.27: 10.6.By the prioritization method it was dephased a qualitative rank estimates of 12-point scale giving them corresponding weighted coefficients of significance. Students’ aspiration levels identity regardless of attitude to risk is established, as well as greater consistency of opinions of those tested regarding the acceptability of higher scale scores. Charac- teristic points’ correlation analysis of the utility functions constructed for closed and open decision-making problems revealed a statistically probable relationship between the characteristic points: n0,25–n–, n0,5–n0, n0,75–n*.

scholarly journals Perceived Relative Wealth and Risk Taking

2021 ◽  
Author(s):  
Dietmar Fehr ◽  
Yannick Reichlin
Keyword(s):  
Risk Taking ◽  
Relative Wealth
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