On temperance and risks spreading
Résumé
This paper shows that temperance is the highest order risk preferences condition for which spreading N independent and unfair risks provides the highest level of welfare than any other possible allocations of risks. These results are also interpreted through the concept of N-superadditivity of the utility premium. This paper provides a novel application of temperance, not in terms of two risks as it is common, but in terms of N risks.
Domaines
Economies et financesOrigine | Fichiers produits par l'(les) auteur(s) |
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