Influence of perception on the selection of risk treatments

Perception of risk is determined by a number of factors including cognitive processes, psychophysics of the brain and mental models, which are at the foundation of behavioural economics. The normative models of risk assessment based on expected utility omit the role of perception biases, and the descriptive models lack predictive ability. This thesis introduces the concept of disutility as a quantifier of risk perception that modifies the expected utility calculus to predict preferences under uncertainty.