On comparison of the principles of equivalent utility and its applications

  • M. Chudziak Institute of Mathematics, University of Rzeszow, 1 Prof. St. Pigonia str., 35-310, Rzeszow, Poland
Keywords: insurance premium, quasideviation mean, comparison, equality, positive homogeneity, risk loading
Published online: 2019-12-31


An insurance premium principle is a way of assigning to every risk, represented by a non-negative bounded random variable on a given probability space, a non-negative real number. Such a number is interpreted as a premium for the insuring risk. In this paper the implicitly defined principle of equivalent utility is investigated. Using the properties of the quasideviation means, we characterize a comparison in the class of principles of equivalent utility under Rank-Dependent Utility, one of the important behavioral models of decision making under risk. Then we apply this result to establish characterizations of equality and positive homogeneity of the principle. Some further applications are discussed as well.

Article metrics
PDF downloads: 159
Abstract views: 396
How to Cite
Chudziak M. On Comparison of the Principles of Equivalent Utility and Its Applications. Carpathian Math. Publ. 2019, 11 (2), 240-249.