Changing risks and optimal effort

David Crainich, Louis Eeckhoudt and Mario Menegatti

Journal of Economic Behavior & Organization, 2016, vol. 125, issue C, 97-106

Abstract: Consider a decision maker who can engage in effort to increase the probability of facing a better risky situation. Intuition suggests that effort should increase when there is a greater difference between the best risky situation and the worse one. We show that this intuition is not necessarily valid and we consider the cases of risk averters and risk lovers.

Keywords: Effort; Self-protection; Nth-order risk changes; Mixed risk aversion; Mixed risk loving (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268116000172
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Changing risks and optimal effort (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:125:y:2016:i:c:p:97-106

DOI: 10.1016/j.jebo.2016.01.009

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().