Risk Attitude & Utility: Certainty Equivalents with Exponential Utility
This lesson is part of the course
In this lesson
You value the three K2 options with an exponential utility function and see that a risk-averse company picks a different option than expected value does.
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Lessons in this course
- Payoff Tables & Decision Criteria: Maximax, Maximin, Regret and EV Locked
- Decision Trees: Rolling Back Chance and Decision Nodes Locked
- Value of Perfect Information (EVPI) Locked
- Value of Sample Information: Bayes Update of a Market Survey Locked
- Risk Attitude & Utility: Certainty Equivalents with Exponential Utility Locked
- Monte Carlo Simulation of a Project NPV Locked
- Sensitivity Tornado: Which Uncertainty Drives the NPV? Locked
- Real Options: The Value of Waiting and of Expanding Locked