Entropy 2006, 8(1), 18-24; doi:10.3390/e8010018
Article

Utility Function from Maximum Entropy Principle

Sufi Institute, P.O.Box 45195-1547, Zanjan, Iran and Department of Physics, Zanjan University, P.O.Box 45196-313, Zanjan, Iran.
Received: 4 December 2005; Accepted: 30 January 2006 / Published: 31 January 2006
PDF Full-text Download PDF Full-Text [102 KB, uploaded 16 September 2008 11:01 CEST]
Abstract: Recently we used the maximum entropy principle for finding the price density in a multi agent insurance market. The result is similar to what the Buhlmann had obtained by maximizing the utility function. Here we begin with the price density that is derived by applying the maximum entropy principle to a conservative economic system (exchange market), then reverse the Buhlmann calculation to find the utility function and the risk aversion of agents with respect to this density.
Keywords: utility function; price density; maximum entropy principle; risk aversion.

Article Statistics

Load and display the download statistics.

Citations to this Article

Cite This Article

MDPI and ACS Style

Darooneh, A.H. Utility Function from Maximum Entropy Principle. Entropy 2006, 8, 18-24.

AMA Style

Darooneh AH. Utility Function from Maximum Entropy Principle. Entropy. 2006; 8(1):18-24.

Chicago/Turabian Style

Darooneh, Amir H. 2006. "Utility Function from Maximum Entropy Principle." Entropy 8, no. 1: 18-24.

Entropy EISSN 1099-4300 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert