Normalized measures of concavity and Ross’s strongly more risk averse order
نویسندگان
چکیده
The Arrow-Pratt (A-P) definitions of absolute and relative risk aversion dominate the discussion of risk aversion and defining “more risk averse”. Ross (Econometrica 49:621–663, 1981) notes, however, that being A-P more risk averse is not sufficient for addressing many important comparative static questions. Consequently he introduces “a new and stronger measure for comparing two agents’ attitudes towards risk...”. Ross does not provide a corresponding measure of risk aversion. This paper uses a normalized measure of concavity to characterize the Ross definition of strongly more risk averse on bounded intervals. Other properties and uses of these normalized measures of concavity are also presented.
منابع مشابه
Risk premiums and certainty equivalents of loss-averse newsvendors of bounded utility
Loss-averse behavior makes the newsvendors avoid the losses more than seeking the probable gains as the losses have more psychological impact on the newsvendor than the gains. In economics and decision theory, the classical newsvendor models treat losses and gains equally likely, by disregarding the expected utility when the newsvendor is loss-averse. Moreover, the use of unbounded utility to m...
متن کاملA Risk-averse Inventory-based Supply Chain Protection Problem with Adapted Stochastic Measures under Intentional Facility Disruptions: Decomposition and Hybrid Algorithms
Owing to rising intentional events, supply chain disruptions have been considered by setting up a game between two players, namely, a designer and an interdictor contesting on minimizing and maximizing total cost, respectively. The previous studies have found the equilibrium solution by taking transportation, penalty and restoration cost into account. To contribute further, we examine how incor...
متن کاملComparison of p300 in risk-seeker and risk-averse people during simple gambling task
Risk preference, the degree of tendency to take risk, has a fundamental role at individual and social health and is divided to risk seeker and risk averse. Therefore, the study of neural corelates of risk preferences is essential at the field of psychology and psychiatry. The current study aimed to examine and compare an ERP component named P300 between subjects with different risk preferences....
متن کاملEvaluation of the concavity depth and inclination in jaws using CBCT
Introduction: Nowadays, using implants as a choice in patient's treatment plans has become popular. The aim of this study was to determine the prevalence of mandibular lingual and maxillary buccal concavity, mean concavity depth and angle and its relation to age and gender. Materials and Methods: In 200 CBCT, concavity depth and angle were measured in 2 mm superior to the inferior alveolar c...
متن کاملA game Theoretic Approach to Pricing, Advertising and Collection Decisions adjustment in a closed-loop supply chain
This paper considers advertising, collection and pricing decisions simultaneously for a closed-loop supplychain(CLSC) with one manufacturer(he) and two retailers(she). A multiplicatively separable new demand function is proposed which influenced by pricing and advertising. In this paper, three well-known scenarios in the game theory including the Nash, Stackelberg and Cooperative games are expl...
متن کامل