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Handbook of the Economics of Risk and Uncertainty
book

Handbook of the Economics of Risk and Uncertainty

by Mark Machina, W. Kip Viscusi
November 2013
Beginner content levelBeginner
896 pages
35h 10m
English
North Holland
Content preview from Handbook of the Economics of Risk and Uncertainty
Jack Meyer
120
3.4.8 Other Risk Aversion Terms and Measures
Rather than additional conditions on the first and second derivatives of u(x), other
contributions to the discussion of risk aversion add conditions that restrict the sign of
higher order derivatives of u(x). These conditions provide another way to strengthen
the requirement that A
u
(x) A
v
(x) for all x so that additional comparative static findings
can be obtained. Ekern (1980) does this in a very general fashion defining nth degree risk
aversion as follows.
Definition3.3: Decision maker with utility function u(x) is nth degree risk averse if
(−1)
n−1
· u
(n)
(x) > 0 for all x.
In this ...
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Publisher Resources

ISBN: 9780444536853