Utility functions as a model of attitude towards risk

Nikola Cholakov

Economic Thought journal, 2013, issue 1, 103-117

Abstract: In this paper we follow such an approach which explains the motivation and behavior of both insured and insurers and throws some light on the background of the insurance premiums. In addition it is shown that according to the Law of diminishing marginal utility more risk aversive and cautious attitude limits the negative impact of incurred financial losses on utility scale.

JEL-codes: D81 G22 G32 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:bas:econth:y:2013:i:1:p:103-117

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