World Library  

QR link for Utility, Rationality and Beyond – from Behavioral Finance to Informational Finance
Add to Book Shelf
Flag as Inappropriate
Email this Book

Utility, Rationality and Beyond – from Behavioral Finance to Informational Finance

By Sukanto Bhattacharya

Click here to view

Book Id: WPLBN0002097084
Format Type: pdf
File Size: 425 KB
Reproduction Date: 9/1/2011

Title: Utility, Rationality and Beyond – from Behavioral Finance to Informational Finance  
Author: Sukanto Bhattacharya
Language: English
Subject: Non Fiction, Mathematics, Finances
Collections: Mathematics, Finance Management, Most Popular Books in Bratislava, Finance, Special Collection Mathematics, Economy, Authors Community, Math, Most Popular Books in China, Literature, Science
Publication Date:
Publisher: Hexis, Phoenix
Member Page: Florentin Smarandache


APA MLA Chicago

Bhattacharya, S. (2005). Utility, Rationality and Beyond – from Behavioral Finance to Informational Finance. Retrieved from

This work covers a substantial mosaic of related concepts in utility theory as applied to financial decision-making. It reviews some of the classical notions of Benthamite utility and the normative utility paradigm offered by the von Neumann-Morgenstern expected utility theory; exploring its major pitfalls before moving into what is postulated as an entropic notion of utility. Extrinsic utility is proposed as a cardinally measurable quantity; measurable in terms of the expected information content of a set of alternative choices. The entropic notion of utility is subsequently used to model the financial behavior of individual investors based on their governing risk-return preferences involving financial structured products manufactured out of complex, multi-asset options. Evolutionary superiority of the Black-Scholes function in dynamic hedging scenarios is computationally demonstrated using a haploid genetic algorithm model programmed in Borland C. The work explores, both theoretically and computationally, the psycho-cognitive factors governing the financial behavior of individual investors both in the presence as well as absence of downside risk and postulates the concepts of resolvable and irresolvable risk. A formal theorem of consistent preference is proposed and proved. The work also analyzes the utility of an endogenous capital guarantee built within a financial structured product. The aspect of investor empowerment is discussed in terms of how financial behavior of an investor may be transformed if he or she is allowed a choice of one or more assets that may gain entry into the financial structured product. Finally there is a concluding section wherein the different facets are placed in their proper perspective and a number of interesting future research directions are also proposed.


Click To View

Additional Books

  • Algebra-Russian (by )
  • Fuzzy Cognitive Maps and Neutrosophic Co... (by )
  • Smarandache Sequences, Stereograms and S... (by )
  • The Power of Our Words (by )
  • The Future of the Internet : And How to ... (by )
  • Family and More : Enemies or Friends? (by )
  • The Marketing of Ideas and Social Issues (by )
  • The Public Domain : Enclosing the Common... (by )
  • Breathe Smart : The Secret to Happiness,... (by )
  • French Natural Remedies & Recipes from B... (by )
  • The Giant Mushroom (by )
  • Secret of the Sands (by )
Scroll Left
Scroll Right


Copyright © World Library Foundation. All rights reserved. eBooks from Project Gutenberg are sponsored by the World Library Foundation,
a 501c(4) Member's Support Non-Profit Organization, and is NOT affiliated with any governmental agency or department.