Two definitions of risk aversion are given. The former refers the measure of risk aversion to the risk premium. The latter defines risk aversion as a decreasing preference for an increasing risk. If the von Neumann- Morgenstern utility function exists both definitions are equivalent, in the other case not. Examples are given.
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Cites work
- scientific article; zbMATH DE number 4118105 (Why is no real title available?)
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Cited in
(19)- The ordinal utility under uncertainty and the measure of risk aversion in terms of preferences
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- First order versus second order risk aversion
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