Another Type of Risk Aversion.

Richard Zeckhauser, Emmett B. Keeler

ResearchPublished 1969

A formulation incorporating the concept of "size-of-risk" aversion into the process of selecting a utility function. This concept extends and complements Pratt's normative observation of risk aversion--namely, as wealth increases, many decisionmakers would feel that they ought to pay less insurance against a given risk. However, as the size of potential loss increases, decisionmakers are more averse to risk and would be willing to pay a larger premium. They display what is known as (positive) size-of-risk aversion. In selecting a utility function, both concepts should be considered. 22 pp. Ref.

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  • Copyright: RAND Corporation
  • Availability: Available
  • Year: 1969
  • Print Format: Paperback
  • Paperback Pages: 22
  • Paperback Price: $20.00
  • Document Number: RM-5996-PR

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RAND Style Manual
Zeckhauser, Richard and Emmett B. Keeler, Another Type of Risk Aversion. RAND Corporation, RM-5996-PR, 1969. As of October 12, 2024: https://www.rand.org/pubs/research_memoranda/RM5996.html
Chicago Manual of Style
Zeckhauser, Richard and Emmett B. Keeler, Another Type of Risk Aversion. Santa Monica, CA: RAND Corporation, 1969. https://www.rand.org/pubs/research_memoranda/RM5996.html. Also available in print form.
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