IDEAS home Printed from https://ideas.repec.org/a/bla/agecon/v8y1992i1p21-31.html
   My bibliography  Save this article

Cardinal criteria for ranking uncertain prospects

Author

Listed:
  • David Bigman

Abstract

The purpose of this paper is to develop criteria for comparing and ranking uncertain prospects when we have some information on the extent to which agents are risk‐averse. The basis for these comparisons is the value of the certainty equivalent outcome of the corresponding uncertain prospects. Clearly, the ranking established by the values of the certainty equivalent outcome is identical to the ranking established by the expected utility of the outcome. By comparing the former values, however, we can determine not only the ranking of the uncertain prospects under consideration but we can also determined by how much one prospect would be more valuable than the other in terms of money – for that particular agent. The paper develops expressions for approximating the values of the certainty equivalent outcomes on the basis of the central moments of their distribution and the value of the underlying coefficient of variation. These criteria are then applied for comparing alternative crop rotation and irrigation practices of wheat in Israel.

Suggested Citation

  • David Bigman, 1992. "Cardinal criteria for ranking uncertain prospects," Agricultural Economics, International Association of Agricultural Economists, vol. 8(1), pages 21-31, December.
    • Handle: RePEc:bla:agecon:v:8:y:1992:i:1:p:21-31
    DOI: 10.1111/j.1574-0862.1992.tb00228.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1574-0862.1992.tb00228.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1574-0862.1992.tb00228.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:agecon:v:8:y:1992:i:1:p:21-31. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.