Effects of background risks on cautiousness with an application to a portfolio choice problem

A-Tier
Journal: Journal of Economic Theory
Year: 2011
Volume: 146
Issue: 1
Pages: 346-358

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We provide necessary and sufficient conditions on an individual's expected utility function under which any zero-mean idiosyncratic risk increases cautiousness (the derivative of the reciprocal of the absolute risk aversion), which is the key determinant for this individual's demand for options and portfolio insurance.

Technical Details

RePEc Handle
repec:eee:jetheo:v:146:y:2011:i:1:p:346-358
Journal Field
Theory
Author Count
3
Added to Database
2026-01-25