Option price without expected utility |
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| Authors: | Paan Jindapon W Douglass Shaw |
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| Institution: | aDepartment of Economics, University of Alabama, Tuscaloosa, AL 35487-0224, United States;bDepartment of Agricultural Economics, Texas A&M University, College Station, TX 77843-2124, United States |
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| Abstract: | We consider the meaning of the option price, commonly acknowledged as the preferred ex ante welfare measure, in the rank-dependent expected utility (RDEU) framework. The importance of this pertains to performing benefit-cost analysis when RDEU maximizers are prevalent in society. |
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| Keywords: | Option price Rank-dependent expected utility |
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