Utility functions as a model of attitude towards risk Cover Image

Функциите на полезност като модел на отношението към риска
Utility functions as a model of attitude towards risk

Author(s): Nikola Cholakov
Subject(s): Economy
Published by: Институт за икономически изследвания при Българска академия на науките
Keywords: JEL: G22; G32; D81

Summary/Abstract: In this paper we follow such an approach which explains the motivation and behavior of both insured and insurers and throws some light on the background of the insurance premiums. In addition it is shown that according to the Law of diminishing marginal utility more risk aversive and cautious attitude limits the negative impact of incurred financial losses on utility scale.

  • Issue Year: 2013
  • Issue No: 1
  • Page Range: 103-117
  • Page Count: 15
  • Language: Bulgarian