EQM Research Seminar: “Who should exert more effort? Risk aversion, downside risk aversion and optimal prevention” by Richard PETER -Tippie College of Business

June 17, 2019

26 June 2019Online event
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Richard PETER

Tippie College of Business, The University of Iowa – United States of America

Date and Location

Thursday, June 26th, 2019 – 09:30 – 11:00

Lille: B254 / Paris: Visioroom P305


I provide new results on how risk preferences affect optimal prevention. I identify a comparative risk aversion and a comparative downside risk aversion effect and highlight those cases where both effects are aligned. Alignment depends on a probability threshold, which, in turn, only depends on the preferences of a benchmark agent. This allows to define an entire class of decision-makers who all share the same comparative static prediction relative to the reference agent. I interpret my results in terms of Arrow-Pratt risk aversion and the Schwarzian derivative, and also study several classes of parametric preferences changes.

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