Abstract
The assumption of constant risk aversion often leads to a considerable simplification of decision theoretic analyses. It is shown that this restriction on constant risk aversion permits the description of a wide range of risk averse patterns between the extreme cases of risk neutrality and the exclusive orientation on the pessimistic maxmin criterion. In particular, a new axiomatic foundation of the constant risk aversion is given and a series of properties for the certainty equivalent are derived. Possible applications are shown by the treatment of risk premiums, values of information, portfolio selection, capital market theory and syndicates.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
