The Role of Utility Theory in Risk Management for Strategic Decisions

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dc.contributor.authorAbu, I.N
dc.contributor.authorJohn, E.E
dc.date.accessioned2017-11-07T13:34:54Z
dc.date.available2017-11-07T13:34:54Z
dc.date.issued2014
dc.descriptionStaff Publicationsen_US
dc.description.abstractThis study investigates the shape of the utility function across the total outcome domain to determine whether its shape differs across decision makers. However, the objective of the study is to examine whether the differences in the global shape of the utility function affect strategic behavior. In an attempt to achieve this objective, the study adopted EXP-IPT method and the two-piece utility function method. Findings from the result reviews that there is heterogeneity in the shape of utility functions of real decision makers and that this heterogeneity affects strategic decisions. Utility is often measured using the certainty equivalence technique in empirical studies that deal with decision making under risk. In prospect theory, the shape of a decisionmakers' utility function is assumed to differ between the domain of gains and the domain of losses. The proposed convex/concave utility function predicts risk-prone behaviour in the domain of losses and risk-averse behavior in the domain of gains.en_US
dc.identifier.citationAbu, I.N and John, E.E (2014) The Role of Utility Theory in Risk Management for Strategic Decisions. Nigerian Journal of Management Studies Vol. 12(2), 156-167pp.en_US
dc.identifier.urihttp://ir.unilag.edu.ng:8080/xmlui/handle/123456789/2820
dc.language.isoenen_US
dc.publisherFaculty of Business Administration, University of Lagosen_US
dc.subjectUtilityen_US
dc.subjectMeasurementen_US
dc.subjectPortfolio Managers and Organizationsen_US
dc.subjectRisken_US
dc.titleThe Role of Utility Theory in Risk Management for Strategic Decisionsen_US
dc.typeArticleen_US
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