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Changing risks and optimal effort

Archive ouverte : Article de revue

Crainich, David | Eeckhoudt, Louis | Menegatti, Mario

Edité par HAL CCSD ; Elsevier

International audience. Consider a decision maker who can engage in effort to increase the probability of facing a better risky situation. Intuition suggests that effort should increase when there is a greater difference between the best risky situation and the worse one. We show that this intuition is not necessarily valid and we consider the cases of risk averters and risk lovers.

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