Econometrica: Jan 1964, Volume 32, Issue 1
Risk Aversion in the Small and in the Large
https://doi.org/0012-9682(196401/04)32:1/2<122:RAITSA>2.0.CO;2-W
p.
122-136
John W. Pratt
This paper concerns utility functions for money. A measure of risk aversion in the small, the risk premium or insurance premium for an arbitrary risk, and a natural concept of decreasing risk aversion are discussed and related to one another. Risks are also considered as a proportion of total assets.Log In To View Full Content