Accession Number:

AD0689154

Title:

ANOTHER TYPE OF RISK AVERSION

Descriptive Note:

Corporate Author:

RAND CORP SANTA MONICA CA

Personal Author(s):

Report Date:

1969-05-01

Pagination or Media Count:

21.0

Abstract:

A formulation is made incorporating the concept of size-of-risk aversion into the process of selecting a utility function. This concept extends and complements normative observation of risk aversion, namely, that as wealth increases, many decisionmakers would feel that they ought to pay less insurance against a given risk. However, as the size of potential loss increases, decisionmakers are more averse to risk and would be willing to pay a larger premium. They display what is known as positive size-of-risk aversion. In selecting a utility function, both concepts should be considered.

Subject Categories:

  • Administration and Management

Distribution Statement:

APPROVED FOR PUBLIC RELEASE