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A NOTE ON RISK AVERSION AND PREFERENCES
Author(s) -
Mann Barbara S.
Publication year - 1991
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1991.tb01257.x
Subject(s) - economics , risk aversion (psychology) , substitution (logic) , certainty , arrow , econometrics , ambiguity aversion , microeconomics , mathematical economics , expected utility hypothesis , actuarial science , mathematics , computer science , ambiguity , geometry , programming language
The relationship between Arrow‐Pratt measures of risk aversion and the standard income and substitution effects in certainty problems is presented. Particular emphasis is placed on the relationship between curvature properties of indifference maps and properties of relative risk aversion. The results are applied to the demand for insurance and in models with asymmetric information.