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Risk Aversion in the Small and in the Large
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1976
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Behavioral Decision MakingFinancial Risk ManagementRisk MetricUtility FunctionsAsset PricingRisk ManagementManagementRisk AversionDecision TheoryInsuranceEconomicsFinanceBehavioral EconomicsFinancial EconomicsInsurance PremiumBusinessFinancial Decision-makingIntertemporal Portfolio ChoiceRisk Analysis (Business)Decision Science
This paper concerns utility functions for money. A measure of risk aversion in the small, the risk premium or insurance premium for an arbitrary risk, and a natural concept of decreasing risk aversion are discussed and related to one another. Risks are also considered as a proportion of total assets.