To analyze the impact of background risks, decreasing absolute risk aversion (DARA) must be combined with other restrictions on the shape of the utility function in order to make preferences risk vulnerable. In this note, we indicate that risk vulnerability can also be associated with the sole...

This paper examines preferences toward particular classes of lottery pairs. We show how such concepts as prudence and temperance can be fully characterized by a preference relation over these lotteries. If preferences are defined in an expected-utility framework with differentiable utility, the...

This paper aims to extend the results by Ross (1981) [15] and by Modica and Scarsini (2005) [13] to stochastic dominance of degree 4 and over. Specifically, it is shown that Ross' approach can be extended to any order of risk attitude beyond the generalization proposed by Modica and Scarsini by...