The effect of health status on portfolio decisions has been extensively studied from an empirical viewpoint. In this paper, we propose a theoretical model of individuals' choice of financial assets under bivariate utility functions depending on wealth and health. Our model relies on the...

In this paper, we indicate that risk vulnerability can be associated with the concept of downside risk aversion (DRA) and an assumption about its behavior, namely that it is decreasing in wealth. Specifically, decreasing downside risk aversion in the Arrow-Pratt and Ross senses are respectively...

Bivariate risk apportionment is the preference for dispersing risks associated with two aspects of individuals' well being into different states of the world. In this paper, we propose an intensity measure of this preference by extending to the bivariate case the concept of marginal rate of...

The concept of absolute risk aversion proposed by K. Arrow (1965) and J. Pratt (1964) and the assumption that it is decreasing in wealth has played a central role in the analysis of risky choices. Ten years later S. Richard (1975) defined correlation aversion in the framework of bivariate...

To analyze the impact of background risks, decreasing absolute risk aversion (DARA) must be combined with other restrictions on the shape of the utility function in order to make preferences risk vulnerable. In this note, we indicate that risk vulnerability can also be associated with the sole...

The relationship between willingness to pay (WTP) to reduce the probability of an adverse event and the degree of risk aversion is ambiguous. The ambiguity arises because paying for protection worsens the outcome in the event the adverse event occurs, which influences the expected marginal...

The degree of downside risk aversion (or equivalently prudence) is so far usually measured by -U'''/U''. We propose here another measure, U'''/U', which has interesting properties, different from those related to -U'''/U''. It also appears that the two measures are not mutually exclusive....

The concept of prudence is nowadays almost as well accepted as that of risk aversion. We show that the concept of temperance deserves a similar status since it rests on the same basic ideas as the other two ones. The analysis also specifies the link which exists in the expected utility model...

The formal definition of the term « prudence » in economics is due to Kimball [1990]. Since then the notion of prudence is linked to the choice of a level of precautionary saving while risk aversion remains perceived as a preference towards a risky situation. In this paper ?' after a survey of...

While it reduces the probability of facing a primary (or vaccine-preventable) disease, vaccination may also introduce the risk of facing vaccine induced side effects or secondary diseases. In this paper, we address the link between this feature of vaccination and attitudes toward risk. Risk...