Abstract
A cardinal measure of risk which represents the safety-first criteria is defined. The functional form of that measure is determined for a subgroup of risk-averse agents that do not have money illusion. An empirical illustration of possible applications of that measure shows a method of identifying the subgroup of agents for which a given alternative dominates the others - in a group of risky alternatives when none of these alternatives dominates any of the others according to the first and the second criteria of stochastic dominance.
| Original language | English |
|---|---|
| Pages (from-to) | 225-235 |
| Number of pages | 11 |
| Journal | American Journal of Agricultural Economics |
| Volume | 78 |
| Issue number | 1 |
| DOIs | |
| State | Published - 1 Jan 1996 |
| Externally published | Yes |
Keywords
- Certainty-equivalent
- Money-illusion
- Risk-aversion
- Safety-first
- Stochastic-dominance
ASJC Scopus subject areas
- Agricultural and Biological Sciences (miscellaneous)
- Economics and Econometrics