{"product_id":"economic-and-financial-decisions-under-risk-9780691122151","title":"Economic and Financial Decisions under Risk","description":"\u003cb\u003eBook Synopsis\u003c\/b\u003e\u003cbr\u003eThe book presents a thoroughly accessible introduction to risk, bridging the gap between the traditionally separate economics and finance literatures.\u003cbr\u003e\u003cbr\u003e\u003cb\u003eTrade Review\u003c\/b\u003e\u003cbr\u003eWinner of the 2007 Kulp-Wright Book Award, American Risk and Insurance Association \"This delightful little book is aimed at advanced undergraduate and first year graduate students who need to learn about modeling risk... It contains deep and insightful discussions about all the topics under consideration.\"--Tapen Sinha, Journal of Risk and Insurance\u003cbr\u003e\u003cbr\u003e\u003cb\u003eTable of Contents\u003c\/b\u003e\u003cbr\u003ePreface ix     I: Decision Theory 1      Chapter 1: Risk Aversion 3  1.1 An Historical Perspective on Risk Aversion 3  1.2 Definition and Characterization of Risk Aversion 7  1.3 Risk Premium and Certainty Equivalent 9  1.4 Degree of Risk Aversion 13  1.5 Decreasing Absolute Risk Aversion and Prudence 16  1.6 Relative Risk Aversion 17  1.7 Some Classical Utility Functions 19  1.8 Bibliographical References, Extensions and Exercises 22  Chapter 2: The Measures of Risk 27  2.1 Increases in Risk 28  2.2 Aversion to Downside Risk 36  2.3 First-Degree Stochastic Dominance 37  2.4 Bibliographical References, Extensions and Exercises 39      II Risk Management 43     Chapter 3: Insurance Decisions 45  3.1 Optimal Insurance: an Illustration 47  3.2 Optimal Coinsurance 49  3.3 Comparative Statics in the Coinsurance Problem 53  3.4 The Optimality of Deductible Insurance 56  3.5 Bibliographical References, Extensions and Exercises 59  Chapter 4: Static Portfolio Choices 65  4.1 The One-Risky-One-Riskfree-Asset Model 65  4.2 The Effect of Background Risk 684.3 Portfolios of Risky Assets 70  4.4 Bibliographical References, Extensions and Exercises 74  Chapter 5: Static Portfolio Choices in an Arrow-Debreu Economy 77  5.1 Arrow-Debreu Securities and Arbitrage Pricing 78  5.2 Optimal Portfolios of Arrow-Debreu Securities 80  5.3 A Simple Graphical Illustration 83  5.4 Bibliographical References, Extensions and Exercises 85  Chapter 6: Consumption and Saving 89  6.1 Consumption and Saving under Certainty 89  6.2 Uncertainty and Precautionary Savings 95  6.3 Risky Savings and Precautionary Demand 98  6.4 Time Consistency 99  6.5 Bibliographical References, Extensions and Exercises 101  Chapter 7: Dynamic Portfolio Management 107  7.1 Backward Induction 108  7.2 The Dynamic Investment Problem 109  7.3 Time Diversification 113  7.4 Portfolio Management with Predictable Returns 114  7.5 Learning about the Distribution of Excess Returns 117  7.6 Bibliographical References, Extensions and Exercises 119  Chapter 8: Risk and Information 123  8.1 The Value of Information 123  8.2 Comparative Statics Analysis 130  8.3 The Hirshleifer Effect 134  8.4 Bibliographical References, Extensions and Exercises 136  Chapter 9: Optimal Prevention 141  9.1 Prevention under Risk Neutrality 142  9.2 Risk Aversion and Optimal Prevention 142  9.3 Prudence and Optimal Prevention 144  9.4 Bibliographical References, Extensions and Exercises 145      III Risk Sharing 151     Chapter 10: Efficient Allocations of Risks 153  10.1 Risk Sharing: an Illustration 153  10.2 Description of the Economy and Definition 155  10.3 Characterization of Efficient Allocations of Risk 157  10.4 Aggregation of Preferences 163  10.5 Bibliographical References, Extensions and Exercises 165  Chapter 11: Asset Pricing 169  11.1 Competitive Markets for Arrow-Debreu Securities 169  11.2 The First Theorem of Welfare Economics 170  11.3 The Equity Premium 17211.4 The Capital Asset-Pricing Model 175  11.5 Two-Fund Separation Theorem 177  11.6 Bond Pricing 179  11.7 Bibliographical References, Extensions and Exercises 184  IV Extensions 189  Chapter 12: Asymmetric Information 191  12.1 Adverse Selection 192  12.2 Moral Hazard 199  12.3 The Principal-Agent Problem 203  12.4 Bibliographical References, Extensions and Exercises 209  Chapter 13: Alternative Decision Criteria 213  13.1 The Independence Axiom and the Allais Paradox 215  13.2 Rank-Dependent EU 217  13.3 Ambiguity Aversion 221  13.4 Prospect Theory and Loss Aversion 224  13.5 Some Concluding Thoughts 226  13.6 Bibliographical References, Extensions and Exercises 227      Index 231","brand":"Princeton University Press","offers":[{"title":"Default Title","offer_id":49526155608407,"sku":"9780691122151","price":57.8,"currency_code":"GBP","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0817\/1739\/5799\/files\/9780691122151.jpg?v=1731863161","url":"https:\/\/bookcurl.com\/products\/economic-and-financial-decisions-under-risk-9780691122151","provider":"Book Curl","version":"1.0","type":"link"}