Risk aversion and the long run

Thoma, Johanna ORCID: 0000-0002-1364-4521 (2019) Risk aversion and the long run. Ethics, 129 (2). pp. 230-253. ISSN 0014-1704

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Abstract

This article argues that Lara Buchak’s risk-weighted expected utility (REU) theory fails to offer a true alternative to expected utility theory. Under commonly held assumptions about dynamic choice and the framing of decision problems, rational agents are guided by their attitudes to temporally extended courses of action. If so, REU theory makes approximately the same recommendations as expected utility theory. Being more permissive about dynamic choice or framing, however, undermines the theory’s claim to capturing a steady choice disposition in the face of risk. I argue that this poses a challenge to alternatives to expected utility theory more generally.

Item Type:	Article
Official URL:	https://www.journals.uchicago.edu/toc/et/current
Additional Information:	© 2018 University of Chicago Press
Divisions:	Philosophy, Logic and Scientific Method
Subjects:	B Philosophy. Psychology. Religion > B Philosophy (General)
Date Deposited:	15 Jun 2018 16:11
Last Modified:	12 Dec 2024 01:39
URI:	http://eprints.lse.ac.uk/id/eprint/88363

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