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Preferences and Subjective Probabilities

Chapter
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Part of the SpringerBriefs in Economics book series (BRIEFSECONOMICS)

Abstract

This chapter explains the relationship between preferences and subjective probabilities, and it shows how to model the relationship between the utility function, state-contingent goods, preferences and probabilities.

Keywords

Indifference curves Certainty line Probability line Safety line Subjective probability Leontief utility function Certainty equivalent Risk premium 

Copyright information

© Svend Rasmussen 2011

Authors and Affiliations

  1. 1.Institute of Food and Resource EconomicsUniversity of CopenhagenFrederiksberg C, CopenhagenDenmark

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