In economics, the utility function measures the welfare or satisfaction of a consumer as a function of the consumption of real goods, such as food or clothing. Utility function is widely used in ...

Certainty equivalence (CE) and probability equivalence (PE) methods are the two most frequently used procedures for constructing von Neumann-Morgenstern utility functions. In this paper, we compare ...

This article obtains demand functions for risky assets without making a priori assumptions about the form of the utility function. In a simple portfolio model, the envelope theorem is applied to the ...