Advertisement

2 Decision Theory

  • Thorsten Hens
  • Marc Oliver Rieger
Chapter
  • 445 Downloads
Part of the Springer Texts in Business and Economics book series (STBE)

Abstract

Consider the following game: you roll a dice, if you roll a 6, you win 6 million € otherwise you win nothing. You can play only once. Let us assume your expected utility function is given by u(x) =log10x (base 10 logarithm, i.e., log10(10n) = n) and your initial wealth is 10,000 €.

Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  • Thorsten Hens
    • 1
  • Marc Oliver Rieger
    • 2
  1. 1.Department of Banking and FinanceUniversity of ZurichZürichSwitzerland
  2. 2.Department of Business AdministrationUniversity of TrierTrierGermany

Personalised recommendations