A biological model is developed here to determine the fittest attitude to risk. With a fixed environment, the type maximizing expected offspring is selected. This yields the expected utility theorem when translated into a criterion for evaluating gambles over commodities. With a random environment, however, the type selected is strictly less averse to idiosyncratic risk than to risk which is co...

We propose a new decision criterion under risk in which people extract both utility from anticipatory feelings ex ante and disutility from disappointment ex post. The decision maker chooses his degree of optimism, given that more optimism raises both the utility of ex ante feelings and the risk of disappointment ex post. We characterize the optimal beliefs and the preferences under risk generat...

We introduce a unified framework to incorporate risk in Markov decision processes (MDPs), via prospect maps, which generalize the idea of coherent/convex risk measures in mathematical finance. Most of the existing risk-sensitive approaches in various literature concerning with decision-making problems are contained in the framework as special instances. Within the framework, we solve the optima...

Using a Principal – Agent framework, we start by pointing out two normative risk allocation criteria. We show that the risk allocation criteria come from the incentive and participation constraints within the maximization program. The first criterion is expressed as follows: risk should be allocated to the partner best able to manage it. The second criterion stipulates that risk should be alloc...

We study a coordinated maintenance problem for multi-turbine offshore wind-farms. The deterioration of the turbines follows Poisson process and optimal order quantity single wind-farm, as well coalition wind-farms, is obtained using analogy with risk-averse newsvendor model considering conditional value at risk (CVaR) criterion. apply theory robust dynamic coalitional games to design stable all...

Preschool children at familial risk for reading disability were assessed on cognitive and linguistic variables and compared with preschoolers without familial risk. Risk children displayed performance profiles resembling those of older children with reading disability. Each group received intensive instruction in phonemic awareness and structured book reading. Instructed risk children made some...