This chapter of a collective book aims at presenting the basics of decision making under risk. We first define notions … of risk and increasing risk and recall definitions and classifications (that are valid independently of any … representation) of behavior under risk. We then review the classical model of expected utility due to von Neumann and Morgenstern …

-market outcomes, adverse selection, moral hazard and risk aversion. The model combines student loans with an elementary optimal income …

. This paradigm, whose Expected Utility version takes the form of Arrow & Pratt's more risk averse concept, will be studied …, preserves the flavor of the "more pessimism than greediness" characterization of monotone risk aversion by Chateauneuf, Cohen …

experiments support the relevance of so-called comparative optimism in decision under risk. In the context of illegal activities …

This paper studies monotone risk aversion, the aversion to monotone, meanpreserving increase in risk (Quiggin [21]), in …-preserving increases in risk are closely related to the notion of comparative dispersion introduced by Bickel & Lehmann [3, 4] in Non …-parametric Statistics. We present a characterization of the pairs (u; f) of monotone risk averse decision makers, based on an index of …

This article analyzes the eff ect of risk and risk aversion on the long-term equilibrium technology mix in an … plants is high. Risk-averse fi rms reduce the capacity of the riskiest technology and develop the capacity of the other …, compared to risk-neutral fi rms. In the particular case where a risk-neutral fi rm invests heavily in baseload technology and …

that equilibrium asset prices can rise if the representative agent's risk aversion increases. If the income effect, which … implies enhanced saving as a result of an increase in risk aversion, dominates the substitution effect, which causes the … prices are forced to rise when the representative agent is more risk adverse. By disentangling risk aversion and …

The choice of a portfolio of technologies by risk averse firms is analyzed. Two technologies with random marginal costs … fferent, and diff erence in risk aversion can explain a full specialization of the industry, the less risk averse fi rms using … the low cost technology and the more risk averse fi rms the other one. The framework is used to discuss the issue of …

We propose a New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model where a risk aversion shock enters a … parameters (such as the risk aversion parameter), the Taylor rule coefficients and the role of this risk aversion shock on output … and real money balances in the Eurozone. Our analysis suggests that risk aversion was a more important component of output …