Most frequently used class of utility functions for modelling the investment policy of individual agents by the constant relative risk aversion (CRRA) utility functions. The objective of this paper is to try to provide the plausible risk aversion parameter of individual households under this assumption. I argue that the risk aversion of an individual investor may be significantly larger than is...

We seek to determine the optimal amount of the insurer’s investment in all types of assets for a small and closed economy. The goal is to detect the implications and contributions the risk seeker and risk aversion insurer commonly make and the effectiveness in the investment decision. Also, finding the optimum portfolio for each is the main goal of the present study. To this end, we adopted the...

Human attitude towards risk is mixed. However, looking at the persuasive argument of diminishing marginal utility of wealth, academia has adopted risk aversion as the norm. Inculcating risk aversion, expected utility hypothesis (EUH) is used to rank risky options. ‘Allais paradox’ contradicted EUH but promoted the conviction of risk aversion intuitively on the basis of certainty effect. Most of...

Livestock insurance consists of livestock owners pooling resources together in order to hedge against the risk attacks by predators on their individual herds. We use an economic model study optimal and discuss its viability improving outcomes for owners. The benefit from depends owners' level aversion. calibrate using data Project Snow Leopard investigate potential achieving conservation goals....

The aim of this study is to examine the equity premium puzzle in Iran for the quarterly period of 1993-2016. In this regard, the hybrid bivariate Garch model and also fuzzy dummy variables with consumption capital asset pricing model (C-CAPM) have been used. The results of study show that using C-CAPM within fuzzy dummy variables (CCAPM-F), the relative risk aversion coefficient of investor is ...

BACKGROUND Emerging data from younger and middle-aged persons suggest that cognitive ability is negatively associated with risk aversion, but this association has not been studied among older persons who are at high risk of experiencing loss of cognitive function. METHODS Using data from 369 community-dwelling older persons without dementia from the Rush Memory and Aging Project, an ongoing l...

How does investors' aversion to environmental risk affect their reaction towards firms' earnings announcements? We explore this by analyzing announcements made U.S. firms between 2002 and 2016. The results show that performance at the firm level is important for investors as influences investment behaviors of who have some degree risk. These appreciate exhibit a high performance, i.e., successf...

Expected utility functions are limited to second-order (conditional) risk aversion, while non-expected utility functions can exhibit either first-order or second-order (conditional) risk aversion. We extend the concept of orders of conditional risk aversion to orders of conditional dependent risk aversion. We show that first-order conditional dependent risk aversion is consistent with the frame...

Risk aversion is a fundamental concept in economics used to explain agents' behavior under uncertainty. Risk aversion in auctions has been justified through the many uncertainties faced by bidders and through the large value of bids relative to bidders' assets. In first-price auctions, risk aversion renders more aggress­ sive bidding, while bidding in ascending auc­ tions is not affected, leadi...