= 27d567bc2d48d9f40e9ccc20ea370b15)
Faber comments on Is risk aversion really irrational ? - Less Wrong
You are viewing a comment permalink. View the original post to see all comments and the full post content.
= 783df68a0f980790206b9ea87794c5b6)
Loading…= b715d02e85f7b3b4ae65ca3d3e450868)
Subscribe to RSS Feed
Powered by Reddit
= f037147d6e6c911a85753b9abdedda8d)
You are viewing a comment permalink. View the original post to see all comments and the full post content.
Comments (65)
The point is that we may have utility functions where u(p1A+p2B) != p1u(A)+p2u(B). That is, the utility of a bet may not be equal to the expected value of the utility of the outcomes.
I am well aware. That's only the case for linear, i.e. 'risk neutral', utility functions.
The thing is, utility is defined as the thing you are risk neutral with respect to. If you're not risk neutral with respect to it, then it's not utility.