The Shape of Utility Functions and Organizational Behavior
March 2002
Research Paper
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Based on measurements with 332 owner-managers, the global shape of the utility function (i.e., S-shaped versus concave or convex over the total range of outcomes) appears to discriminate organizational behavior. Whereas the degree of risk aversion, based on the local shape of the utility function, may be important in explaining owner-manager's trading behavior, the global shape of the utility function appears to drive more structural organizational behavior.
Keywords
Classifications using
Journal of Economic Literature (JEL) Classification System
- M31 : Marketing
- M : Business Administration and Business Economics; Marketing; Accounting
- C44 : Statistical Decision Theory; Operations Research
- L29 : Firm Objectives, Organization, and Behavior: Other
Automatically Extracted Terms
- utility function
- function
- utility
- shape
- behavior
- philip hans franses
- probability
- management
- decision
- risk aversion
- result
- research
- production
- probability weighting
- marketing
- weighting
- philip
- prospect theory
- production system
- owner-manager
