Risk and choice: A research saga

Christian Gollier (), James Hammitt and Nicolas Treich

Journal of Risk and Uncertainty, 2013, vol. 47, issue 2, 129-145

Abstract: The economic theory of decision making under risk has seen remarkable advances over the 50 years since Pratt’s (1964) characterization of risk aversion under expected utility. We review developments in three key areas to which Louis Eeckhoudt has made significant contributions: (1) increases in risk and risk taking; (2) self-protection and risk aversion; and (3) higher (and lower) order derivatives of utility. For each, we identify seminal papers, puzzles, and recent developments. The saga of research on these topics reveals that important contributions were made long ago and yet significant gains in understanding continue to be made. Recent advances often have roots in early results and researchers can profit by examining the old as well as the new papers. Copyright Springer Science+Business Media New York 2013

Keywords: Risk aversion; Prudence; Risk; Self-protection; Insurance; Portfolio choice; Expected utility; D81 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (17)

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Working Paper: Risk and Choice: A Research Saga (2013)
Working Paper: Risk and Choice: A Research Saga (2013)
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DOI: 10.1007/s11166-013-9175-7

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