Weitzman’s Dismal Theorem (Weitzman 2009) challenged the economic analysis of climate policy: The uncertainty about the impact of climate change would be so large that expected utility maximisation is either undefined or arbitrary. Unfortunately, Weitzman’s is an impossibility theorem: It shows what cannot be done. It does not show what could or should be done instead. This paper attempts to pr...

We provide an equilibrium asset pricing formula under moral hazard on the assumption of a power utility function and an endogenous riskless rate. Moral hazard is defined here as a firm’s change of measure that is incontractible. We show explicitly in closed form that moral hazard distorts asset prices by (1) moving the market price of diffusive risk in the opposite direction to an investor’s ma...

We offer a new explanation for the long-run underperformance of IPO stocks using prospect theory. According to this theory, uncertain outcomes enter an investor’s utility function through a nonlinear transformation of their probabilities. Small probability events are given more weight than in expected utility theory, whereas median and large probability events are given less weight. IPO stocks ...

This paper discusses how numerically imprecise information can be modelled and how a risk evaluation process can be elaborated by integrating procedures for numerically imprecise probabilities and utilities. More recently, representations and methods for stating and analysing probabilities and values (utilities) with belief distributions over them (second order representations) have been sugges...

Motivating students to pursue science careers is a top priority among many science educators. We add to the growing literature by examining the impact of a utility value intervention to enhance student's perceptions that biomedical science affords important utility work values. Using an expectancy-value perspective we identify and test two types of utility value: communal (other-oriented) and a...

Economic theory distinguishes two concepts of utility: decision utility, objectively quantifiable by choices, and experienced utility, referring to the satisfaction by an obtainment. To date, experienced utility is typically measured with subjective ratings. This study intended to quantify experienced utility by global levels of neuronal activity. Neuronal activity was measured by means of elec...

This paper re-examines the question of the appropriate unit of measurement in cost utility analysis and the technique that will measure it. There are two main themes. The first is an examination of the use of `utility' as an object of measurement. It is argued that, as it is often conceived and measured, `utility' is not an appropriate unit. The second major theme of the paper is the selection ...

Melissa M. Brown, MD, MN, MBA Gary C. Brown, MD, MBA Peter Kertes, MD It is the philosophy of Evidence-Based Ophthalmology that the best evidencebased medicine should provide the foundation for knowledge, which will allow practitioners to provide the highest quality of medicine for our patients. Although the knowledge of a numerical or statistical change is critical, this information must be ta...

The optimization problem of general utility case is considered for countable state semi-Markov decision processes. The regret-utility function is introduced as a function of two variables, one is a target value and the other is a present value. We consider the expectation of the regret-utility function incured until the reaching time to a given absorbing set. In order to characterize the regret...