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Apportioning of risks via stochastic dominance
Eeckhoudt, Louis; Schlesinger, Harris; Tsetlin, Ilia - 2008
Consider a simple two-state risk with equal probabilities for the two states. In particular, assume that the random wealth variable Xi dominates Yi via ith-order stochastic dominance for i = M,N. We show that the 50-50 lottery [XN + YM, YN + XM] dominates the lottery [XN + XM, YN + YM] via (N +...
Persistent link: https://www.econbiz.de/10010264492
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Putting risk in its proper place
Eeckhoudt, Louis; Schlesinger, Harris - 2005
This paper examines preferences towards particular classes of lottery pairs. We show how concepts such as prudence and …
Persistent link: https://www.econbiz.de/10010271070
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Changes in risk and the demand for saving
Eeckhoudt, Louis; Schlesinger, Harris - 2008
-income risk, second-degree increases in risk require prudence to induce increased saving demand. However, prudence is not …
Persistent link: https://www.econbiz.de/10010264428
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The consumption-based determinants of the term structure of discount rates
Gollier, Christian - 2005
The efficient rate of return of a zero-coupon bond with maturity t is determined by our expectations about the mean (+), variance (-) and skewness (+) of the growth of aggregate consumption between 0 and t. The shape of the yield curve is thus determined by how these moments vary with t. We...
Persistent link: https://www.econbiz.de/10010261120
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Joint measurement of risk aversion, prudence and temperance
Ebert, Sebastian; Wiesen, Daniel - 2010
We propose a method to measure the intensity of risk aversion, prudence (downside risk aversion) and temperance (outer … approach is not based on expected utility theory. In our experiment we find evidence for risk aversion, prudence and temperance … for being (second order) risk-loving. This highlights the importance of prudence when considering economic decisions under …
Persistent link: https://www.econbiz.de/10010293367
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Barriers to Diversification and Regional Allocation of Capital
Broll, Udo; Roldán-Ponce, Antonio; Wahl, Jack E. - 2007
In order to evaluate the allocational effectiveness of regional policy when harmonizing regional economic conditions firms? preferences play a pivot role. If harmonization hinders risk diversification of the firm, then instead of regional diversification of capital agglomeration of capital...
Persistent link: https://www.econbiz.de/10010296826
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Spatial allocation of capital: The role of risk preferences
Broll, Udo; Roldán-Ponce, Antonio; Wahl, Jack E. - 2010
of so-called relative prudence unambiguously decides whether or not the diversi cation of income risk favours the …
Persistent link: https://www.econbiz.de/10010301356
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Environmental auditing in management systems and public policy
Sinclair-Desgagné, Bernard; Gabel, H. Landis - 1997
an environmental audit and the size of the expected wage in this case depend crucially on whether the agent's prudence …
Persistent link: https://www.econbiz.de/10011608277
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Risk aversion and prudence in contests
Sahm, Marco - 2017
' comparative prudence under which a higher common level of risk aversion leads to lower aggregate effort in symmetric contests …
Persistent link: https://www.econbiz.de/10011637730
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Risk Aversion and Prudence in Contests
Sahm, Marco - 2017
’ comparative prudence under which a higher common level of risk aversion leads to lower aggregate effort in symmetric contests …
Persistent link: https://www.econbiz.de/10011657138