Abstract
The concept of risk aversion plays a central role in EU theory. The power of the Arrow-Pratt analysis of risk aversion and of the corresponding interpretation of increasing risk in terms of stochastic dominance contributed in large measure to the success of EU theory in replacing the mean-variance approach in both theoretical and applied study of problems relating to risk. One requirement for more general theories of choice under risk to be acceptable as a replacement for EU theory is the existence of appropriate concepts of increases in risk and in risk aversion.
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© 1993 Springer Science+Business Media Dordrecht
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Quiggin, J. (1993). Risk Aversion in RDEU Theory. In: Generalized Expected Utility Theory. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-2182-8_6
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DOI: https://doi.org/10.1007/978-94-011-2182-8_6
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-010-4966-5
Online ISBN: 978-94-011-2182-8
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