| Abstract: | Many decision problems involve more than one attribute. Separable multi-attribute utility functions are commonly used to model preferences in such situations. We consider the case in which one attribute can be identified as money. The price at which non-monetary attributes may be substituted by money, the relation of this price to a decision-maker's wealth, and the implications on attitudes toward risk are examined for additively and multiplicatively separable multi-attribute utility functions. In particular, it is shown that additive separability, price independent of wealth and monetary risk-aversion are mutually inconsistent. |
