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Managerial Economics and Strategy, 2/e
book

Managerial Economics and Strategy, 2/e

by Jeffrey M. Perloff, James A. Brander
February 2016
Beginner to intermediate content levelBeginner to intermediate
500 pages
33h 40m
English
Pearson
Content preview from Managerial Economics and Strategy, 2/e

14.3 Reducing Risk

If most accidents occur in the home, why not live elsewhere?

Risk-averse people want to eliminate or reduce the risks they face. Risk-neutral people avoid unfair bets that are stacked against them, and even risk-preferring people avoid very unfair bets. Individuals can avoid optional risky activities, but often they can’t escape risk altogether. Property owners, for instance, know that their property may be damaged or stolen. However, they may be able to reduce the probability that bad events (such as earthquakes, tornadoes, fires, floods, and thefts) happen to them.

The simplest way to avoid risk is to abstain from optional ...

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Publisher Resources

ISBN: 9780134472553