Subramanian, Narayanan; Menon, Nidhiya - EconWPA - 2004
We study the issue of project choice when a risk-averse agent must choose whether to invest in two projects of the same … speed of learning (ii) the type-specific risk and (iii) his risk- aversion and investment horizon. We show that, contrary to … intuition, an increase in type-specific risk may lead to a decrease in diversification. Our theory is applicable to occupational …