Decisions under unpredictable losses: An examination of the restated diversification principle

An experimental test of the descriptive adequacy of the \textit{restated diversification principle} is presented. The principle postulates that risk-averse utility maximizers will pool risks for their mutual benefit, even if information is missing about the probabilities of losses. It is enough for people to assume that they face equal risks when they pool risks. The results of the experiment support the principle.

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Year of publication:	2007
Authors:	Ahmed, Ali
Published in:	Judgment and Decision Making. - Society for Judgment and Decision Making, ISSN 1930-2975. - Vol. 2.2007, October, p. 312-316
Publisher:	Society for Judgment and Decision Making
Subject:	Group behavior \| loss sharing \| unpredictable losses \| experiment \| risk pooling

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Extent:	application/pdf text/html
Type of publication:	Article
Language:	English
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005248629