ABSTRACT In this paper, we show that risk vulnerability can be associated with the concept of dow... more ABSTRACT In this paper, we show that risk vulnerability can be associated with the concept of downside risk aversion (DRA) and an assumption about its behavior, namely that it is decreasing in wealth. Specifically, decreasing downside risk aversion in the Arrow–Pratt and Ross senses are respectively necessary and sufficient for a zero-mean background risk to raise the aversion to other independent risks.
The degree of downside risk aversion (or equivalently prudence) is so far usually measured by -U&... more The degree of downside risk aversion (or equivalently prudence) is so far usually measured by -U'''/U''. We propose here another measure, U'''/U', which has interesting properties, different from those related to -U'''/U''. It also appears that the two measures are not mutually exclusive. Instead, they seem to be rather complementary as shown through an economic application.
The aim of this paper is to examine,the dependency,of the benefits of health improvements,on como... more The aim of this paper is to examine,the dependency,of the benefits of health improvements,on comorbid,conditions. We ,find that under plausible conditions regarding the utility function over wealth and health, the willingness to pay for health improvements increases with the severity of the comorbid ,conditions. This positive relationship between ,willingness to pay and severity of comorbid ,conditions has implications both
The paper addresses the decomposition of firms’ profit inefficiency (i.e. the difference between ... more The paper addresses the decomposition of firms’ profit inefficiency (i.e. the difference between the observed profit and the maximal profit that could have been earned) in a context of output price uncertainty. More precisely, we separate this inefficiency into price expectation error, expected profit loss due to risk preference and technical inefficiency. Within this decomposition, the allocative inefficiency is explicitly
The concept of prudence is nowadays almost as well accepted as that of risk aversion. We show tha... more The concept of prudence is nowadays almost as well accepted as that of risk aversion. We show that the concept of temperance deserves a similar status since it rests on the same basic ideas as the other two ones. The analysis also specifies the link which exists in the expected utility model between on the one hand the signs of
ABSTRACT In this paper, we show that risk vulnerability can be associated with the concept of dow... more ABSTRACT In this paper, we show that risk vulnerability can be associated with the concept of downside risk aversion (DRA) and an assumption about its behavior, namely that it is decreasing in wealth. Specifically, decreasing downside risk aversion in the Arrow–Pratt and Ross senses are respectively necessary and sufficient for a zero-mean background risk to raise the aversion to other independent risks.
The degree of downside risk aversion (or equivalently prudence) is so far usually measured by -U&... more The degree of downside risk aversion (or equivalently prudence) is so far usually measured by -U'''/U''. We propose here another measure, U'''/U', which has interesting properties, different from those related to -U'''/U''. It also appears that the two measures are not mutually exclusive. Instead, they seem to be rather complementary as shown through an economic application.
The aim of this paper is to examine,the dependency,of the benefits of health improvements,on como... more The aim of this paper is to examine,the dependency,of the benefits of health improvements,on comorbid,conditions. We ,find that under plausible conditions regarding the utility function over wealth and health, the willingness to pay for health improvements increases with the severity of the comorbid ,conditions. This positive relationship between ,willingness to pay and severity of comorbid ,conditions has implications both
The paper addresses the decomposition of firms’ profit inefficiency (i.e. the difference between ... more The paper addresses the decomposition of firms’ profit inefficiency (i.e. the difference between the observed profit and the maximal profit that could have been earned) in a context of output price uncertainty. More precisely, we separate this inefficiency into price expectation error, expected profit loss due to risk preference and technical inefficiency. Within this decomposition, the allocative inefficiency is explicitly
The concept of prudence is nowadays almost as well accepted as that of risk aversion. We show tha... more The concept of prudence is nowadays almost as well accepted as that of risk aversion. We show that the concept of temperance deserves a similar status since it rests on the same basic ideas as the other two ones. The analysis also specifies the link which exists in the expected utility model between on the one hand the signs of
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papers by David Crainich