de Meza, David 
ORCID: 0000-0002-5638-8310 and Dickinson, P. T.
(1984)
Risk preferences and transaction costs.
Journal of Economic Behavior & Organization, 5 (2).
pp. 223-236.
ISSN 0167-2681
Identification Number: 10.1016/0167-2681(84)90019-2
Abstract
Kahneman and Tversky have collected evidence of behavior in the face of risk which is seemingly at odds with von Neumann-Morgenstern expected utility theory. To account for their observations they propose a new approach which they christen ‘Prospect Theory’. This note argues that introducing transactions costs into expected utility theory systematically accounts for many empirical results without unduly straining the conventional analysis. It may therefore be premature to abandon expected utility theory.
| Item Type: | Article |
|---|---|
| Official URL: | http://www.elsevier.com/wps/find/journaldescriptio... |
| Additional Information: | © 1984 Elsevier Science Publishers B. V. |
| Divisions: | Management |
| Subjects: | H Social Sciences > HB Economic Theory |
| Date Deposited: | 13 Apr 2011 10:13 |
| Last Modified: | 01 Oct 2024 03:28 |
| URI: | http://eprints.lse.ac.uk/id/eprint/35523 |
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