THE ROLE OF THE AMOUNT OF MONEY IN RISK-TAKING
Journal Title: Copernican Journal of Finance & Accounting - Year 2017, Vol 6, Issue 2
Abstract
Decisions based on the expected value have two components: the probability and the value or utility that is often expressed in money. Regarding the first element, it can be pointed out that many decisions contain risk concerning the outcomes of the available options, i.e. concerning the probability of the occurrence of an event. Uncertainty refers, in most cases, to this part, but having said that, the second part, the amount of money, still matters in a decision-making situation. Since the research of the effect of the amount can be considered neglected compared to that of probabilities, I focused on the second component: on the role of the amount of money. The aim was to explore to what extent a 300 times difference in the amount affects the choice.
Authors and Affiliations
Viktor Nagy
Keywords
Related Articles
- EP ID EP246392
- DOI 10.12775/CJFA.2017.010
- Views 94
- Downloads 0
LEGAL REGULATION OF TOURISM BUSINESS IN GEORGIA
Research objective: Georgia, as a country favorable for tourism, can offer the various types of tourism products and therefore, is presented as an attractive country for travelers. The research aims: to analyze tourism b...
MANAGING FINANCIAL STABILITY BY THE EUROPEAN CENTRAL BANK IN THE PERIOD 2008–2012
In reaction to the global financial crisis and ineffectiveness of traditional monetary policy, European Central Bank undertook a number of unconventional measures to preserve financial stability in the EU. The paper pres...
THE LEVEL OF SHADOW ECONOMY IN WARMIŃSKO-MAZURSKI AND KUJAWSKO-POMORSKI REGIONS
This paper offers the appraisal of the shadow economy in two regions in Poland: Kujawsko-Pomorskie and Warmińsko-Mazurskie. The MIMIC approach was applied. In the begging of analyzed period the higher level of shadow eco...
THE ROLE OF INSTANT PAYMENT SYSTEMS IN THE POLISH ECONOMY
Instant payments are one of the most important current trends in modern banking. Solutions of this type have been implemented form large-value to retail banking. The purpose of this article is to introduce broad spectrum...
RISKY RISK MEASURES: A NOTE ON UNDERESTIMATING FINANCIAL RISK UNDER THE NORMAL ASSUMPTION
This note compares three different risk measures based on the same stock return data: (1) the portfolio variance as in Markowitz (1952), (2) the value at risk based on the historical return distribution, and (3) the valu...