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ON NON‐MONETARY MEASURES IN THE FACE OF RISKS AND THE SIGNS OF THE DERIVATIVES
Author(s) -
Courbage Christophe,
Rey Béatrice
Publication year - 2010
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/j.1467-8586.2009.00328.x
Subject(s) - prudence , economics , preference , function (biology) , zero (linguistics) , face (sociological concept) , vulnerability (computing) , econometrics , microeconomics , computer science , philosophy , theology , linguistics , computer security , evolutionary biology , biology
Vulnerability of both prudence and temperance towards a sure loss and towards a zero‐mean background risk seems to be a very realistic assumption on individual preference. This paper shows that when the concepts of prudence and temperance are defined in non‐monetary terms, the above assumption is equivalent to the usual signs of the successive derivatives of the utility function.