Abstract
This chapter explains the relationship between preferences and subjective probabilities, and it shows how to model the relationship between the utility function, state-contingent goods, preferences and probabilities.
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We further assume that the state itself is secondary, i.e. that it is the income in the case of dry weather that is important and not the dry weather as such.
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© 2011 Svend Rasmussen
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Rasmussen, S. (2011). Preferences and Subjective Probabilities. In: Optimisation of Production Under Uncertainty. SpringerBriefs in Economics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-21686-2_5
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DOI: https://doi.org/10.1007/978-3-642-21686-2_5
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Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-21685-5
Online ISBN: 978-3-642-21686-2
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