We study uncertainty averse preferences, that is, complete and transitive preferences that are convex and monotone. We establish a representation result, which is at same time general and rich in structure. Many objective functions commonly used in applications are special cases of this representation. JEL classification: D81

Traditional inventory models focus on risk neutral decision makers, i.e., characterizing replenishment strategies that maximize expected total profit, or equivalently, minimize expected total cost over a planning horizon. In this paper, we propose a general framework for incorporating risk aversion in multi-period inventory models as well as multi-period models that coordinate inventory and pri...

Abstract This paper focuses on risk‐averse‐based optimal operation of a grid‐connected hybrid energy system (HES) composed photovoltaic (PV), diesel generator, and battery storage (BSS). For this goal, information gap decision theory (IGDT) is used to model load demand uncertainty. The aim the minimize cost PV/diesel/BSS by determination power purchased from electricity grid. Since in risk‐aver...

Empirical studies of fishers’ preferences have found that most fishers are risk-averse, while expected-utility theory predicts risk neutrality even for sizable stakes. We test this prediction using data from a stated choice experiment with Swedish commercial fishers. Our results show that almost 90% of the respondents do not behave as expected-utility maximizers. 48% of the fishers can be broad...

Risk-averse optimization has attracted much attention in nite-dimensional stochastic programming. In this paper, we propose a risk-averse approach in the in nite dimensional context of shape optimization. We consider elastic materials under stochastic loading. As measures of risk awareness we investigate the expected excess and the excess probability. The developed numerical algorithm is based ...

This paper assesses quantitatively the impact of legal institutions on entrepreneurial firm dynamics. Owners choose firm size, financial structure and default to manage risk. We find: (i) Less risk averse entrepreneurs run bigger firms and it is optimal for them to incorporate, while more risk averse entrepreneurs run smaller firms and generally are better off remaining unincorporated. (ii) Mor...

Extensive cleaning or checking of patients with obsessive-compulsive disorder (OCD) are often interpreted as strategies to avoid harm and as an expression of the widespread belief that OCD patients are more risk-averse. However, despite its clinical significance, the neural basis of risk attitude in OCD is unknown. Here, we investigated neural activity during risk processing using functional ma...

Energy efficiency policies often involve low-interest loans for retrofit measures in private buildings; the main target of these are meant to be households with otherwise poor access capital. However, such programs can only successful if targeted also take up loans. This paper studies relation between capital and debt aversion adoption European Union countries, employing a demographically repre...

The forest-harvesting and road-construction planning problem basically consists of managing land designated for timber production and divided into harvest cells. For each time period in the given time horizon one must decide which cells to cut and what access roads to build in order to maximize expected net profit under a risk manageable scheme to control the negative impact of the solutions in...