Sentence examples for utility of wealth from inspiring English sources

The generalized contract specifications are obtained by assuming that the investor wishes to maximize end of period expected utility of wealth subject to certain constraints.

We show how such a model can be calibrated and how information about an investor's marginal utility of wealth can be inferred from his or her choice of a distribution.

This paper develops a new calibration technique designed to measure the minimum change in concavity of a utility of wealth function necessary to describe a particular change in production behavior for some discrete change in wealth.

In effect, then, our subject's marginal utility of wealth falls as his wealth rises, and rises as his wealth falls, at a rate of around 10% for every change of $21.

Friedman and Savage speculate that real-world individuals' utility functions often have upward-bending curvature at wealth levels much higher than those currently attained, implying increasing marginal utility of wealth, because a big wealth increase moves the consumer to a new, much higher material and social status.

We thus conclude that a user who maximizes the expected utility of wealth and who has a power utility function will select a distribution for which there is a linear relationship between ln(pi) and ln(wi), with the slope of the line equal to the negative of the exponent g in the underlying utility function.

However, if other choices are to be made for the individual or if the information is to be used for calibrating models of equilibrium it is useful to interpret the resulting set of choices as consistent with the maximization of the expected value of a utility function of wealth and to infer some of the attributes of that function.

The reinsurer designs a robust reinsurance contract that maximizes the penalty-based multiple-priors utility of terminal wealth, subject to the insurer's incentive compatibility constraint.

The insured aims to maximize his/her expected utility of terminal wealth, under the constraint that the insurer wishes to control his/her risk.

Because the utility of extra wealth declines, it is not necessarily illogical to attach a lower subjective value to the upside of the gamble (50% of $11) than to the downside (50% of $10).

Axioms of rational behaviour under uncertainty then suggest the use of the expected utility of final wealth as the appropriate decision criterion.