In this paper, we advance a definition of greater downside risk aversion that applies to both large and small changes in risk preference, and thereby complements the results for small changes reported previously. We show that a downside risk-averse transformation of a utility function results in...

Variation in the degree of downside risk aversion across decision makers has implications for efficient risk sharing. However, except for small differences in risk preferences, there is no index, analogous to the Arrow-Pratt index of risk aversion, that depends only on local properties of the...