There exists no satisfactory theory of risk in current normative decision theories. Notions based on utility curvature … psychologically intuitive. I develop a Pure Risk theory which resolves these problems, is consistent with existing normative theories …, and both internalises and generalises the intuitive notion of risk being related to the probability of not achieving one …

In this paper, we axiomatize a target-based model of choice that allows decision makers to be both risk averse and risk …, capturing in spirit two celebrated ideas: first, the satisficing concept of Simon (1955); second, the switch between risk … aversion and risk seeking popularized by the prospect theory of Kahneman and Tversky (1979). Our axioms are simple and …