Safety-first criteria and their measures of risk

David Bigman

Research output: Contribution to journalArticlepeer-review

29 Scopus citations

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 languageEnglish
Pages (from-to)225-235
Number of pages11
JournalAmerican Journal of Agricultural Economics
Volume78
Issue number1
DOIs
StatePublished - 1 Jan 1996
Externally publishedYes

Keywords

  • Certainty-equivalent
  • Money-illusion
  • Risk-aversion
  • Safety-first
  • Stochastic-dominance

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