Results for 'Risk aversion'

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  1. Risk Aversion and the Long Run.Johanna Thoma - 2019 - Ethics 129 (2):230-253.
    This article argues that Lara Buchak’s risk-weighted expected utility theory fails to offer a true alternative to expected utility theory. Under commonly held assumptions about dynamic choice and the framing of decision problems, rational agents are guided by their attitudes to temporally extended courses of action. If so, REU theory makes approximately the same recommendations as expected utility theory. Being more permissive about dynamic choice or framing, however, undermines the theory’s claim to capturing a steady choice disposition in the (...)
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  2. Risk Aversion and Elite-Group Ignorance.David Kinney & Liam Kofi Bright - forthcoming - Philosophy and Phenomenological Research.
    Critical race theorists and standpoint epistemologists argue that agents who are members of dominant social groups are often in a state of ignorance about the extent of their social dominance, where this ignorance is explained by these agents' membership in a socially dominant group (e.g., Mills 2007). To illustrate this claim bluntly, it is argued: 1) that many white men do not know the extent of their social dominance, 2) that they remain ignorant as to the extent of their dominant (...)
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  3. Is risk aversion irrational? Examining the “fallacy” of large numbers.H. Orri Stefánsson - 2020 - Synthese 197 (10):4425-4437.
    A moderately risk averse person may turn down a 50/50 gamble that either results in her winning $200 or losing $100. Such behaviour seems rational if, for instance, the pain of losing $100 is felt more strongly than the joy of winning $200. The aim of this paper is to examine an influential argument that some have interpreted as showing that such moderate risk aversion is irrational. After presenting an axiomatic argument that I take to be the (...)
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  4.  30
    Risk Aversion and Elite‐Group Ignorance.David Kinney & Liam Kofi Bright - forthcoming - Wiley: Philosophy and Phenomenological Research.
    Philosophy and Phenomenological Research, EarlyView.
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  5. What Is Risk Aversion?H. Orri Stefansson & Richard Bradley - 2019 - British Journal for the Philosophy of Science 70 (1):77-102.
    According to the orthodox treatment of risk preferences in decision theory, they are to be explained in terms of the agent's desires about concrete outcomes. The orthodoxy has been criticised both for conflating two types of attitudes and for committing agents to attitudes that do not seem rationally required. To avoid these problems, it has been suggested that an agent's attitudes to risk should be captured by a risk function that is independent of her utility and probability (...)
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  6.  59
    Can Risk Aversion Survive the Long Run?Hayden Wilkinson - forthcoming - Philosophical Quarterly.
    Can it be rational to be risk-averse? It seems plausible that the answer is yes—that normative decision theory should accommodate risk aversion. But there is a seemingly compelling class of arguments against our most promising methods of doing so. These long-run arguments point out that, in practice, each decision an agent makes is just one in a very long sequence of such decisions. Given this form of dynamic choice situation, and the (Strong) Law of Large Numbers, they (...)
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  7.  57
    Risk Aversion Elicitation: Reconciling Tractability and Bias Minimization. [REVIEW]Mohammed Abdellaoui, Ahmed Driouchi & Olivier L’Haridon - 2011 - Theory and Decision 71 (1):63-80.
    Risk attitude is known to be a key determinant of various economic and financial choices. Behavioral studies that aim to evaluate the role of risk attitudes in contexts of this type, therefore, require tools for measuring individual risk tolerance. Recent developments in decision theory provide such tools. However, the methods available can be time consuming. As a result, some practitioners might have an incentive to prefer “fast and frugal” methods to clean but more costly methods. In this (...)
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  8.  26
    Risk Aversion Over Finite Domains.Jean Baccelli, Georg Schollmeyer & Christoph Jansen - 2021 - Theory and Decision 93 (2):371-397.
    We investigate risk attitudes when the underlying domain of payoffs is finite and the payoffs are, in general, not numerical. In such cases, the traditional notions of absolute risk attitudes, that are designed for convex domains of numerical payoffs, are not applicable. We introduce comparative notions of weak and strong risk attitudes that remain applicable. We examine how they are characterized within the rank-dependent utility model, thus including expected utility as a special case. In particular, we characterize (...)
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  9.  68
    Risk Aversion When Gains Are Likely and Unlikely: Evidence From a Natural Experiment with Large Stakes. [REVIEW]Pavlo Blavatskyy & Ganna Pogrebna - 2008 - Theory and Decision 64 (2-3):395-420.
    In the television show Deal or No Deal a contestant is endowed with a sealed box, which potentially contains a large monetary prize. In the course of the show the contestant learns more information about the distribution of possible monetary prizes inside her box. Consider two groups of contestants, who learned that the chances of their boxes containing a large prize are 20% and 80% correspondingly. Contestants in both groups receive qualitatively similar price offers for selling the content of their (...)
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  10.  89
    Measuring Risk Aversion with Lists: A New Bias. [REVIEW]Antoni Bosch-Domènech & Joaquim Silvestre - 2013 - Theory and Decision 75 (4):465-496.
    Various experimental procedures aimed at measuring individual risk aversion involve a list of pairs of alternative prospects. We first study the widely used method by Holt and Laury :1644–1655, 2002), for which we find that the removal of some items from the lists yields a systematic decrease in risk aversion and scrambles the ranking of individuals by risk aversion. This bias, that we call embedding bias, is quite distinct from other confounds that have been (...)
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  11.  83
    The Tragedy of the Risk Averse.H. Orri Stefánsson - forthcoming - Erkenntnis:1-14.
    Those who are risk averse with respect to money, and thus turn down some gambles with positive monetary expectations, are nevertheless often willing to accept bundles involving multiple such gambles. Therefore, it might seem that such people should become more willing to accept a risky but favourable gamble if they put it in context with the collection of gambles that they predict they will be faced with in the future. However, it turns out that when a risk averse (...)
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  12.  32
    Mixed Risk Aversion and Preference for Risk Disaggregation: A Story of Moments. [REVIEW]Patrick Roger - 2011 - Theory and Decision 70 (1):27-44.
    In a recent article entitled “Putting Risk in its Proper Place,” Eeckhoudt and Schlesinger (2006) established a theorem linking the sign of the n-th derivative of an agent’s utility function to her preferences among pairs of simple lotteries. We characterize these lotteries and show that, in a given pair, they only differ by their moments of order greater than or equal to n. When the n-th derivative of the utility function is positive (negative) and n is odd (even), the (...)
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  13.  5
    Risk-Averse Autonomous Systems: A Brief History and Recent Developments From the Perspective of Optimal Control.Yuheng Wang & Margaret P. Chapman - 2022 - Artificial Intelligence 311:103743.
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  14.  36
    The Risk Aversion Measure Without the Independence Axiom.Aldo Montesano - 1988 - Theory and Decision 24 (3):269-288.
  15.  80
    Risk Aversion in Expected Intertemporal Discounted Utilities Bandit Problems.Jean-Philippe Chancelier, Michel De Lara & André de Palma - 2009 - Theory and Decision 67 (4):433-440.
    We consider a situation where an individual is facing an uncertain situation, but may costly alter his knowledge of the uncertainties. We study in this context how risk aversion may modify the individual search behavior. We consider a one-armed bandit problem (where one arm is safe and the other is risky) and study how the agent risk aversion can change the sequence of arms selected. The main result is that when the utility function is more concave, (...)
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  16.  21
    Risk Aversion, Prudence, and Asset Allocation: A Review and Some New Developments.Michel M. Denuit & Louis Eeckhoudt - 2016 - Theory and Decision 80 (2):227-243.
    In this paper, we consider the composition of an optimal portfolio made of two dependent risky assets. The investor is first assumed to be a risk-averse expected utility maximizer, and we recover the existing conditions under which all these investors hold at least some percentage of their portfolio in one of the assets. Then, we assume that the decision maker is not only risk-averse, but also prudent and we obtain new minimum demand conditions as well as intuitively appealing (...)
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  17.  9
    Risk Aversion and the Value of Diagnostic Tests.Han Bleichrodt, David Crainich, Louis Eeckhoudt & Nicolas Treich - 2020 - Theory and Decision 89 (2):137-149.
    Diagnostic tests allow better informed medical decisions when there is uncertainty about a patient’s health status and, therefore, about the desirability to undertake treatment. This paper studies the relation between the expected value of diagnostic information and a patient's risk aversion. We show that the ex ante value of diagnostic information increases with risk aversion for diseases with low prevalence, but decreases with risk aversion for diseases with high prevalence. On the other hand, the (...)
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  18. Risk Aversion for Losses and the Nash Bargaining Solution.Hans Peters - 2021 - Theory and Decision 92 (3-4):703-715.
    We call a decision maker risk averse for losses if that decision maker is risk averse with respect to lotteries having alternatives below a given reference alternative in their support. A two-person bargaining solution is called invariant under risk aversion for losses if the assigned outcome does not change after correcting for risk aversion for losses with this outcome as pair of reference levels, provided that the disagreement point only changes proportionally. We present an (...)
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  19.  2
    Risk Aversion, Downside Risk Aversion, and the Transition to Entrepreneurship.Claudio A. Bonilla & Marcos Vergara - 2020 - Theory and Decision 91 (1):123-133.
    In this paper, we discuss the transition from secure employment to risky self-employment caused by a small increase in wealth. Building on the apportioning risk literature, we prove that the transition from secure employment to risky entrepreneurship is based on a measure of the difference between the strength of downside risk aversion and the strength of risk aversion. This result highlights the idea that using the behavioral approach of risky lotteries to study entrepreneurship can produce (...)
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  20. Rational Choice, Risk Aversion, And Evolution.Samir Okasha - 2007 - Journal of Philosophy 104 (5):217-235.
  21. Small Stakes Risk Aversion in the Laboratory: A Reconsideration.Glenn W. Harrison, Morten I. Lau, Don Ross & J. Todd Swarthout - unknown
    Evidence of risk aversion in laboratory settings over small stakes leads to a priori implausible levels of risk aversion over large stakes under certain assumptions. One core assumption in statements of this calibration puzzle is that small-stakes risk aversion is observed over all levels of wealth, or over a â sufficiently largeâ range of wealth. Although this assumption is viewed as self-evident from the vast experimental literature showing risk aversion over laboratory stakes, (...)
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  22.  13
    Learning to Be Risk Averse.James G. March - 1996 - Psychological Review 103 (2):309-319.
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  23.  25
    Risk Aversion in N-Person Bargaining.Hans Peters & Stef Tijs - 1985 - Theory and Decision 18 (1):47-72.
  24.  14
    Health Security and Risk Aversion.Jonathan Herington - 2016 - Bioethics 30 (7):479-489.
    Health security has become a popular way of justifying efforts to control catastrophic threats to public health. Unfortunately, there has been little analysis of the concept of health security, nor the relationship between health security and other potential aims of public health policy. In this paper I develop an account of health security as an aversion to risky policy options. I explore three reasons for thinking risk avoidance is a distinctly worthwhile aim of public health policy: that security (...)
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  25.  93
    Distinguishing Indeterminate Belief From “Risk-Averse” Preferences.Katie Steele - 2007 - Synthese 158 (2):189-205.
    I focus my discussion on the well-known Ellsberg paradox. I find good normative reasons for incorporating non-precise belief, as represented by sets of probabilities, in an Ellsberg decision model. This amounts to forgoing the completeness axiom of expected utility theory. Provided that probability sets are interpreted as genuinely indeterminate belief, such a model can moreover make the “Ellsberg choices” rationally permissible. Without some further element to the story, however, the model does not explain how an agent may come to have (...)
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  26.  1
    Risk-Averse Policy Optimization Via Risk-Neutral Policy Optimization.Lorenzo Bisi, Davide Santambrogio, Federico Sandrelli, Andrea Tirinzoni, Brian D. Ziebart & Marcello Restelli - 2022 - Artificial Intelligence 311:103765.
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  27.  4
    Risk Aversion and Elite‐Group Ignorance.David Kinney & Liam Kofi Bright - forthcoming - Philosophy and Phenomenological Research.
    Philosophy and Phenomenological Research, EarlyView.
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  28.  75
    Decreasing Higher-Order Absolute Risk Aversion and Higher-Degree Stochastic Dominance.Michel Denuit & Liqun Liu - 2014 - Theory and Decision 76 (2):287-295.
    Fishburn and Vickson showed that, when applied to random alternatives with an equal mean, 3rd-degree and decreasing absolute risk aversion stochastic dominances represent equivalent rules. The present paper generalizes this result to higher degrees. Specifically, higher-degree stochastic dominance rules and common preference by all decision makers with decreasing higher-order absolute risk aversion are shown to coincide under appropriate constraints on the respective moments of the random variables to be compared.
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  29.  2
    Assessing Risk Aversion From the Investor’s Point of View.Antonio Díaz & Carlos Esparcia - 2019 - Frontiers in Psychology 10.
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  30.  1
    Risk Aversion and Equilibrium Selection in a Vertical Contracting Setting: An Experiment.Nicolas Pasquier, Olivier Bonroy & Alexis Garapin - forthcoming - Theory and Decision.
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  31.  35
    Proper and Standard Risk Aversion in Two-Moment Decision Models.Fatma Lajeri-Chaherli - 2004 - Theory and Decision 57 (3):213-225.
    For linear distribution classes, mean-variance and expected utility specifications have been shown in the literature to be fully compatible when studying the concepts of risk aversion, prudence, risk vulnerability and temperance. This paper shows that such compatibility does hold for the concept of standard risk aversion but not for the concepts of proper risk aversion and proper prudence.
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  32.  39
    On the Effect of Risk Aversion in Bimatrix Games.Caroline Berden & Hans Peters - 2006 - Theory and Decision 60 (4):359-370.
    Nash equilibria with identical supports are compared for bimatrix games that are different with respect to the risk aversion of player 2. For equilibria in 2× 2-bimatrix games and for equilibria with efficient supports in coordination games it is established for which cases increased risk aversion of player 2 benefits or hurts player 2.
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  33.  11
    Neurocognitive Development of Risk Aversion From Early Childhood to Adulthood.David J. Paulsen, R. McKell Carter, Michael L. Platt, Scott A. Huettel & Elizabeth M. Brannon - 2011 - Frontiers in Human Neuroscience 5.
  34.  31
    On the Definition of Risk Aversion.Aldo Montesano - 1990 - Theory and Decision 29 (1):53-68.
  35.  6
    Does CEO Risk-Aversion Affect Carbon Emission?Ashrafee Hossain, Samir Saadi & Abu S. Amin - forthcoming - Journal of Business Ethics:1-28.
    Does CEO tolerance to risk affect a firm’s long-run sustainability? Using CEO insider debt holding, we show that CEO’s risk-aversion encourages immoral yet rational decisions of emitting more greenhouse gas thereby adversely affecting the firm’s long-run sustainability. Our result is robust to several endogeneity tests including a quasi-natural experiment. Our finding also suggest that to mitigate potential adverse reactions from stakeholders, carbon emitting firms with risk-averse CEOs tend to spend more on CSR activities. Much of the (...)
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  36.  14
    Female CEOs and Core Earnings Quality: New Evidence on the Ethics Versus Risk-Aversion Puzzle.Alaa Mansour Zalata, Collins Ntim, Ahmed Aboud & Ernest Gyapong - 2019 - Journal of Business Ethics 160 (2):515-534.
    The question of whether females tend to act more ethically or risk-averse compared to males is an interesting ethical puzzle. Using a large sample of US firms over the 1992–2014 period, we investigate the effect that the gender of a chief executive officer has on earnings management using classification shifting. We find that the pre-Sarbanes–Oxley Act period was characterized by high levels of classification shifting by both female and male CEOs, but the magnitude of such practices is, surprisingly, significantly (...)
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  37.  30
    Risk and Risk Aversion for State-Dependent Utility.David Kelsey - 1992 - Theory and Decision 33 (1):71-82.
  38.  42
    De Finetti on Risk Aversion: Joseph B. Kadane and Gaia Bellone.Joseph B. Kadane - 2009 - Economics and Philosophy 25 (2):153-159.
    According to Mark Rubinstein ‘In 1952, anticipating Kenneth Arrow and John Pratt by over a decade, he [de Finetti] formulated the notion of absolute risk aversion, used it in connection with risk premia for small bets, and discussed the special case of constant absolute risk aversion.’ The purpose of this note is to ascertain the extent to which this is true, and at the same time, to correct certain minor errors that appear in de Finetti's (...)
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  39.  30
    The Power of Stereotyping and Confirmation Bias to Overwhelm Accurate Assessment: The Case of Economics, Gender, and Risk Aversion.Julie A. Nelson - 2014 - Journal of Economic Methodology 21 (3):211-231.
    Behavioral research has revealed how normal human cognitive processes can tend to lead us astray. But do these affect economic researchers, ourselves? This article explores the consequences of stereotyping and confirmation bias using a sample of published articles from the economics literature on gender and risk aversion. The results demonstrate that the supposedly ‘robust’ claim that ‘women are more risk averse than men’ is far less empirically supported than has been claimed. The questions of how these cognitive (...)
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  40.  15
    The Emergence of Risk Aversion.George G. Szpiro - 1997 - Complexity 2 (4):31-39.
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  41.  68
    Valuing Environmental Costs and Benefits in an Uncertain Future: Risk Aversion and Discounting.Fabien Medvecky - 2012 - Erasmus Journal for Philosophy and Economics 5 (1):1-1.
    A central point of debate over environmental policies concerns how future costs and benefits should be assessed. The most commonly used method for assessing the value of future costs and benefits is economic discounting. One often-cited justification for discounting is uncertainty. More specifically, it is risk aversion coupled with the expectation that future prospects are more risky. In this paper I argue that there are at least two reasons for disputing the use of risk aversion as (...)
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  42.  73
    Separating Marginal Utility and Probabilistic Risk Aversion.Peter Wakker - 1994 - Theory and Decision 36 (1):1-44.
  43.  56
    On S-Convexity and Risk Aversion.Michel Denuit, Claude Lefèvre & Marco Scarsini - 2001 - Theory and Decision 50 (3):239-248.
    The present note first discusses the concept of s-convex pain functions in decision theory. Then, the economic behavior of an agent with such a pain function is represented through the comparison of some recursive lotteries.
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  44.  35
    The Making of a Risk Aversive Society.Henry J. Perkinson - 1991 - AI and Society 5 (1):70-73.
  45.  4
    Explaining Satisficing Through Risk Aversion.Yudistira Permana - 2020 - Theory and Decision 89 (4):503-525.
    This paper extends the analysis of the data from the experiment of Hey et al. : 337–353, 2017), which was designed to test Proposition 2 of the theory of Manski : 155–173, 2017). I focus on how the subjects select the aspiration levels when they choose to satisfice, and try to find a better explanation for that story than that of Manski. I assume that the subjects are expected utility agents and that they think of the payoffs as having a (...)
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  46. On s-Convexity and Risk Aversion.Denuit Michel, Lefevre Claude & Scarsini Marco - 2001 - Theory and Decision 50 (3).
     
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  47.  31
    Benchmark Values for Higher Order Coefficients of Relative Risk Aversion.Michel Denuit & Béatrice Rey - 2014 - Theory and Decision 76 (1):81-94.
    The existing literature on savings, insurance, and portfolio choices under risk has revealed that quite often comparative statics results depend, among other things, upon the values of the coefficients of relative risk aversion and relative prudence. More specifically the benchmark values for these coefficients are, respectively, one and two. Recently, several papers investigated constraints on the higher degree extensions of the coefficients of relative risk aversion and of relative prudence. The present work provides a unified (...)
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  48.  30
    Catastrophe Avoidance and Risk Aversion: Implications of Formal Utility Maximization. [REVIEW]Robert U. Ayres & Manalur S. Sandilya - 1986 - Theory and Decision 20 (1):63-78.
  49.  15
    Going Boldly Where No One Has Gone Before? How Confidentiality Risk Aversion is Killing Research on Sensitive Topics.Ted Palys & John Lowman - 2010 - Journal of Academic Ethics 8 (4):265-284.
    Bernhard and Young (Journal of Academic Ethics, 7, 175-191, 2009) allege that a myth of confidentiality plagues research in North America because of the absence of statute-based legal protections and the requirements of some REBs to limit confidentiality to the extent permitted by law. In this commentary we describe statute-based protections for research confidentiality available in the United States, clarify the legal situation regarding research confidentiality in Canada, and explain that REBs that require confidentiality to be limited by law are (...)
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  50.  5
    Context-Dependent Risk Aversion: A Model-Based Approach.Darío Cuevas Rivera, Florian Ott, Dimitrije Markovic, Alexander Strobel & Stefan J. Kiebel - 2018 - Frontiers in Psychology 9.
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