Expected Utility and Risk-Aversion

This lecture covers the historical development of expected utility theory, starting from Bernouilli's proposal to Von Neumann and Morgenstern's axiomatization. It discusses the concept of risk-aversion, Arrow Pratt measures of risk, and various utility functions. The lecture also explores the critique of expected utility theory, the concept of risk premium, and the implications of risk-aversion in decision-making under uncertainty.