The name is absent



Incremental Risk Vulnerability

Abstract

We present a necessary and sufficient condition on an agent’s utility function for a simple
mean preserving spread in an independent background risk to increase the agent’s risk aver-
sion (incremental risk vulnerability). Gollier and Pratt (1996) have shown that declining
and convex risk aversion as well as standard risk aversion are sufficient for risk vulnerability.
We show that these conditions are also sufficient for incremental risk vulnerability.

In addition, we present sufficient conditions for a restricted set of stochastic increases in an
independent background risk to increase risk aversion.

Journal of Economic Literature Classification Numbers:
D 52, D 81



More intriguing information

1. What Contribution Can Residential Field Courses Make to the Education of 11-14 Year-olds?
2. Herman Melville and the Problem of Evil
3. The name is absent
4. Dynamiques des Entreprises Agroalimentaires (EAA) du Languedoc-Roussillon : évolutions 1998-2003. Programme de recherche PSDR 2001-2006 financé par l'Inra et la Région Languedoc-Roussillon
5. The name is absent
6. Human Development and Regional Disparities in Iran:A Policy Model
7. Linking Indigenous Social Capital to a Global Economy
8. Discourse Patterns in First Language Use at Hcme and Second Language Learning at School: an Ethnographic Approach
9. Estimated Open Economy New Keynesian Phillips Curves for the G7
10. The Impact of Financial Openness on Economic Integration: Evidence from the Europe and the Cis