We introduce a simple measure of risk aversion in the large. Besides satisfying properties which are conceptually analogous to the usual properties of the Arrow-Pratt measure, the index of risk aversion in the large leads to a stronger concept of decreasing risk aversion, which necessarily...

This paper introduces and investigates the concept of repetitive risk aversion. The risk aversion of an increasing and concave utility function is repetitive if the fear of ruin, which measures agent's aversion to risking his entire income, is also increasing and concave. This is shown to be...

We revisit and extend previous theoretical work on internationalization decisions by firms which are imperfectly informed on the state of the demand in the market into which they are planning to export or enter through foreign direct investment (FDI). The latter is a costly strategy mitigating...

This paper identifies the optimal two-period price sequence in the attempt for selling a good, with take-it-or-leave-it offers, when the seller faces ambiguity about the buyers' willingness to pay. If the first round fails, the seller updates its beliefs on the state of the market in accordance...

We analyse the consequences of an increase of information (say as a consequence of the internet), on the equilibrium of a pure exchange economy with n goods and m agents. We assume that such an increase modifies the characteristics of goods la Lancaster and has a positive effect on utility. We...

The plea bargaining procedure, namely the viability of a stage of bargaining between prosecutor and defendant in criminal suits, is analyzed in the framework of a two-sided incomplete information game. It is shown that, for a given parameter configuration, there exists a Bayesian equilibrium...

Harsanyi (1955) proved that, in the context of uncertainty, social ratio- nality and the Pareto principle impose severe constraints on the degree of priority for the worst-off that can be adopted in the social evaluation. Since then, the literature has hesitated between an ex ante approach that...

We analyse participation in medical prevention with an expected utility model that is sufficiently rich to capture diverging features of different prevention procedures. We distinguish primary and secondary prevention (with one or two rounds) for both fatal or non-fatal diseases. Moreover, we...

This paper examines how to satisfy a separability condition related to “independence of the utilities of the dead” (Blackorby et al., 1995; Bommier and Zuber, 2008) in the class of “expected equally distributed equivalent” social orderings (Fleurbaey, 2010). It also inquires into the...

Considering a consumer with standard preferences, I trace out the consequences for risk aversion and prudence of quantity constraints on markets. I first show how the effect can be decomposed into a price risk effect and an endogenously changing risk aversion/prudence effect. Next, I calibrate...