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There are three risk attitudes (risk aversion, risk seeking, and risk neutrality). The risk attitude of “risk aversion” is distinguishable from the concept of “loss aversion.” This entry discusses risk attitudes and then examines the early concepts of risk aversion in the work of mathematician Daniel Bernoulli in 1738 and the psychological research of Amos Tversky and Daniel Kahneman extending the theories in the last quarter of the 20th century.

Risk Attitudes
Risk-Averse Attitude

A risk-averse attitude is the attitude of an individual that he or she will be unwilling to accept a risk in the following situation: When presented a choice as a trade-off between a gamble and a sure thing of equal expected value, the risk-averse individual will be more likely to take the sure thing ...

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