S-Space College of Social Sciences (사회과학대학) Institute of Economics Research (경제연구소) Seoul Journal of Economics Seoul Journal of Economics vol.18(1) (Spring 2005)
Left-side Relatively Strong Increases in Risk and Their Comparative Statics
- Kim, Soojong; Kim, Iltae; Ryu, Suyeol
- Issue Date
- Seoul Journal of Economics, Vol.18 No.1, pp. 45-58
- Left-side Relatively strong increases in risk; Prudence; Relatively strong increases in risk
- This paper proposes a new concept. a left-side relatively strong increase in risk (L-RSIR) order that extends the definition of a relatively strong increase in risk (RSIR) order. We show that for the class of linear payoffs, one can obtain an appealing comparative statics result for L-RSIR shifts by imposing additional restrictions on the risk preferences of a risk-averse decision maker.