Lecture Slides in Consumption and Households

Decision Theory under uncertainty is a PowerPoint presentation from Marcus Vera-Hernandez of University College London. It is a straightforward depiction of decision-making under risk, showing how risk attitudes can be examined using choices among lotteries or willingness to pay for insurances. Shows how risk attitudes can be captured in convexity of the indifference curve or strict concavity of the utility function; and how risk aversion can be quantified by the ratio of second and first derivatives of the utility function, implying that it falls as wealth increases.