Foundations of Risk Measurement. I. Risk As Probable Loss

Peter C. Fishburn
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Peter C. Fishburn: Bell Telephone Laboratories, Inc., Murray Hill, New Jersey 07974

Management Science, 1984, vol. 30, issue 4, 396-406

Abstract: This paper seeks to get behind specific contextual referents of risky situations to consider characteristics of risk that apply to many situations. It is guided by previous theoretical and empirical research in perceived risk, and focuses on the joint effects on risk of loss probability and the distribution of losses. The approach taken follows modern axiomatic theory by proposing conditions on a relation "is at least as risky as" between pairs of probability distributions over an outcome variable. Several sets of axioms for risk that characterize different forms for risk measurement are presented.

Keywords: risk measurement; probability of loss (search for similar items in EconPapers)
Date: 1984
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Citations: View citations in EconPapers (43)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:30:y:1984:i:4:p:396-406

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