lecture 5 Flashcards
1
Q
What is the difference between uncertainty and risk?
A
2
Q
What is the difference between alternatives and states?
A
3
Q
What is rationality in decision under uncertainty?
A
4
Q
What are some possible criteria for decison making?
A
5
Q
What is regret, how is it calculated?
A
6
Q
What are some limitations of the criteria?
A
7
Q
What is choice under risk, What is introduced?
A
8
Q
What is the expected value? how is it calculated?
A
9
Q
What are some issues with EV? What is the St. Petersburg paradox?
A
10
Q
What are the characteristics of utility function that solve the st.petersburg paradox?
A
11
Q
How is expected utility computed? what is utility maximization?
A
12
Q
What is risk preference? how does it relate to utility function?
A
13
Q
What is the certainty equivalent? how does it relate to risk preference?
A
