Increasing Uncertainty: A Definition

Simon Grant and John Quiggin

No 151163, Risk and Sustainable Management Group Working Papers from University of Queensland, School of Economics

Abstract: We present a definition of increasing uncertainty, in which an elementary increase in the uncertainty of any act corresponds to the addition of an `elementary bet' that increases consumption by a fixed amount in (relatively) `good' states and decreases consumption by a fixed (and possibly different) amount in (relatively) `bad' states. This definition naturally gives rise to a dual definition of comparative aversion to uncertainty. We characterize this definition for a popular class of generalized models of choice under uncertainty.

Keywords: Environmental Economics and Policy; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 33
Date: 2004-05-15
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Related works:
Journal Article: Increasing uncertainty: a definition (2005)
Working Paper: Increasing Uncertainty: A Definition (2004)
Working Paper: Increasing Uncertainty: A Definition (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uqsers:151163

DOI: 10.22004/ag.econ.151163

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