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This paper shows that temperance is the highest order risk preference condition for which spreading N independent and unfair risks provides the highest level of welfare than any other possible… Click to show full abstract
This paper shows that temperance is the highest order risk preference condition for which spreading N independent and unfair risks provides the highest level of welfare than any other possible allocations of risks. These results are also interpreted through the concept of N -superadditivity of the utility premium. This paper provides a novel application of temperance, not in terms of two risks as it is common, but in terms of N risks.
Keywords:
temperance;
temperance risk;
risk spreading;
risk
Journal Title: Theory and Decision
Year Published: 2019
Link to full text (if available)
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Journal Title: Theory and Decision
Year Published: 2019
Link to full text (if available)
Share on Social Media: Sign Up to like & get
recommendations!