The Effect of FSD Changes in Multiplicative Background Risk on Risk-taking Attitude
AbstractIn this paper, we consider the effect of First-degree Stochastic Dominance (FSD) changes in background multiplicative risk on the risk- taking attitude of a decision maker. First, we consider contractive FSD changes in background multiplicative risk and analyze the effect of these changes. Then, we consider general FSD changes in background multiplicative risk. Also, in the context of coinsurance, we determine the effect of simple FSD changes and Monotone Likelihood Ratio (MLR) changes in multiplicative background risk.
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Bibliographic InfoPaper provided by EconWPA in its series Risk and Insurance with number 0506001.
Length: 8 pages
Date of creation: 06 Jun 2005
Date of revision:
Note: Type of Document - pdf; pages: 8. 8,pdf,from dvips
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FSD changes; Multiplicative background risk; risk-taking attitude;
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