Abstract
In multiobjective decisions a conflict often arises between reducing multivariate risk, exemplified by correlations among variables, and providing one of the following: stability (in the multiperiod problem) equality (in the multiperson problem) or balance (in the multivariate problem). Additive and multiplicative utility models either do not allow multivariate risk aversion or force a dichotomy between it and stability, equality, or balance. This paper develops a preference model to correct this deficiency. A definition of and conditions for inequality aversion in a measurable multiattribute value function and a measure of local inequality aversion are given as part of this development.
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© 1981 Springer-Verlag Berlin Heidelberg
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Bodily, S.E. (1981). Stability, Equality, Balance, and Multivariate Risk. In: Morse, J.N. (eds) Organizations: Multiple Agents with Multiple Criteria. Lecture Notes in Economics and Mathematical Systems, vol 190. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-45527-8_4
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DOI: https://doi.org/10.1007/978-3-642-45527-8_4
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-10821-4
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