enow.com Web Search

Search results

  1. Results from the WOW.Com Content Network
  2. Indirect utility function - Wikipedia

    en.wikipedia.org/wiki/Indirect_utility_function

    A consumer's indirect utility (,) can be computed from their utility function (), defined over vectors of quantities of consumable goods, by first computing the most preferred affordable bundle, represented by the vector (,) by solving the utility maximization problem, and second, computing the utility ((,)) the consumer derives from that ...

  3. Exponential utility - Wikipedia

    en.wikipedia.org/wiki/Exponential_utility

    Exponential utility implies constant absolute risk aversion (CARA), with coefficient of absolute risk aversion equal to a constant: ″ ′ =. In the standard model of one risky asset and one risk-free asset, [1] [2] for example, this feature implies that the optimal holding of the risky asset is independent of the level of initial wealth; thus on the margin any additional wealth would be ...

  4. Expenditure function - Wikipedia

    en.wikipedia.org/wiki/Expenditure_function

    In microeconomics, the expenditure function represents the minimum amount of expenditure needed to achieve a given level of utility, given a utility function and the prices of goods. Formally, if there is a utility function u {\displaystyle u} that describes preferences over n goods, the expenditure function e ( p , u ∗ ) {\displaystyle e(p,u ...

  5. Isoelastic utility - Wikipedia

    en.wikipedia.org/wiki/Isoelastic_utility

    Isoelastic utility for different values of . When > the curve approaches the horizontal axis asymptotically from below with no lower bound.. In economics, the isoelastic function for utility, also known as the isoelastic utility function, or power utility function, is used to express utility in terms of consumption or some other economic variable that a decision-maker is concerned with.

  6. Linear utility - Wikipedia

    en.wikipedia.org/wiki/Linear_utility

    E.g., the commodity is a heterogeneous resource, such as land. Then, the utility functions are not functions of a finite number of variables, but rather set functions defined on Borel subsets of the land. The natural generalization of a linear utility function to that model is an additive set function.

  7. Exponential discounting - Wikipedia

    en.wikipedia.org/wiki/Exponential_discounting

    For example, consider an investment opportunity that has the following characteristics: pay a utility cost of C at date t = 2 to earn a utility benefit of B at time t = 3. At date t = 1 , this investment opportunity is considered favorable; hence, this function is: − δC + δ^2 B > 0 .

  8. Gorman polar form - Wikipedia

    en.wikipedia.org/wiki/Gorman_polar_form

    Inverting this formula gives the indirect utility function (utility as a function of price and income): (,) = (),where is the amount of income available to the individual and is equivalent to the expenditure ((,)) in the previous equation.

  9. Epstein–Zin preferences - Wikipedia

    en.wikipedia.org/wiki/Epstein–Zin_preferences

    In economics, Epstein–Zin preferences refers to a specification of recursive utility. A recursive utility function can be constructed from two components,: a time aggregator that characterizes preferences in the absence of uncertainty and a risk aggregator that defines the certainty equivalent function that characterizes preferences over static gambles and is used to aggregate the risk ...