The Dual Theory of Choice under Risk

  title={The Dual Theory of Choice under Risk},
  author={Menahem E. Yaari},
  • M. Yaari
  • Published 1987
  • Economics
  • Econometrica
This paper investigates the consequences of the following modification of Expected Utility theory: instead of requiring independence with respect to probability mixtures of risky prospects, require independence with respect to direct mixing of payments o f risky prospects. A new theory of choice under risk- a so-called Dual theory-is obtained. Within this new theory, the following questions are considered: (1) numerical representation of preferences; (2) properties of the utility function; ( 3… 

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