Tradeoffs for Downside Risk-Averse Decision-Makers and the Self-Protection Decision
Abstract
Agents who are averse to increases in downside risk are defined as being averse to changes that shift a certain amount of risk to a lower income level. For downside risk averse decision makers, there are several tradeoffs that must be considered. In PERC Working Paper 1503, PERC Research Scientist Liqun Liu and his coauthors Michel Denuit, Louis Eeckhoudt, and Jack Meyer introduce five new stochastic orders for studying these tradeoffs and show it is possible to make predictions regarding choices of downside risk averse decision makers.
Description
MacroeconomicsCollections
Citation
Liu, Liqun; Denuit, Michel; Eeckhoudt, Louis; Meyer, Jack (2015). Tradeoffs for Downside Risk-Averse Decision-Makers and the Self-Protection Decision. Private Enterprise Research Center, Texas A&M University; Texas A&M University. Library. Available electronically from https : / /hdl .handle .net /1969 .1 /199350.