Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/18826 
Year of Publication: 
2005
Series/Report no.: 
CESifo Working Paper No. 1462
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper examines preferences towards particular classes of lottery pairs. We show how concepts such as prudence and temperance can be fully characterized by a preference relation over these lotteries. If preferences are defined in an expected-utility framework with differentiable utility, the direction of preference for a particular class of lottery pairs is equivalent to signing the nth derivative of the utility function. What makes our characterization appealing is its simplicity, which seems particularly amenable to experimentation.
Subjects: 
properness
prudence
risk apportionment
risk aversion
stochastic dominance
temperance
utility premium
JEL: 
D81
Document Type: 
Working Paper
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