The classical theory of comparative risk aversion shows the equivalence of various criteria for comparing the aversion of cardinal preferences to risks with real outcomes. Parts of this theory have been extended to outcomes in Euclidean spaces. We complete, unify and generalize this theory. Our...

We model the interaction between a regulator and a polluting firm in the optimal mechanism design setting. The particular aspect of the interaction that we model is the regulator's problem of providing incentives to induce optimal adoption of pollution processing technology by the firm, subject...