论文信息 - Which Shape for the Cost Curve of Risk

Which Shape for the Cost Curve of Risk

It is often suggested that the larger the size of risk, the larger our willingness to pay (WTP) for a given reduction of this risk. We show that this is not true in general in the expected utility model. We examine under which conditions the WTP for a marginal reduction in the size of risk is increasing. We also examine the closely related question of whether the risk premium is superadditive in the size of risk.

Louis Eeckhoudt | Christian Gollier | L. Eeckhoudt | C. Gollier

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