Risk as a primitive: A survey of measures of perceived risk

Risk as a primitive: A survey of measures of perceived risk

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Article ID: iaor19982688
Country: Germany
Volume: 19
Issue: 4
Start Page Number: 235
End Page Number: 250
Publication Date: Jan 1997
Journal: OR Spektrum
Authors: ,
Abstract:

The concept of risk is essential to many problems in economics and business. Usually, risk is treated in the traditional expected utility framework where it is defined only indirectly through the shape of the utility function. The purpose of utility functions, however, is to model preferences. In this paper, we review those approaches which directly model risk judgements. After a short review of naive risk measures used in earlier economic literature, we present recent theoretical and empirical developments.

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