Some implications of common consequences in lotteries

David Crainich, Louis Eeckhoudt () and Mario Menegatti
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Louis Eeckhoudt: IESEG School of Management

Journal of Risk and Uncertainty, 2019, vol. 59, issue 2, No 4, 185-202

Abstract: Abstract This work studies the implications of some aspects of preferences toward risk in the choice between two binary lotteries exhibiting a common consequence. The results obtained are then applied to two different problems: the choice between two risky challenges characterized by different rewards in the case of success and different probabilities of success and the choice between self-protection and self-insurance in the presence of the risk of incurring financial loss.

Keywords: Lotteries; Risk aversion; Risky challenges; Self-protection; Self-insurance (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s11166-019-09314-4

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