Risk and risk aversion are important concepts when modeling how to choose from or rank a set of random variables. This chapter reviews and summarizes the definitions and related findings concerning risk aversion and risk in both a mean-variance and an expected utility decision model context.

This note suggests a bridge between stochastic dominance (Rothschild and Stiglitz, 1970 [17], 1973 [18]), inequality measurement (Atkinson, 1970 [1]) and discrimination measurement (Gastwirth, 1975 [10]). Discrimination orderings are defined and illustrated through discrimination curves, in the...

Many experimental studies and surveys have shown that women consistently display more risk-averse behavior than men when confronted with decisions involving risk. These differences in risk preferences, when combined with gender differences in other behavioral traits, such as fondness for...

This handbook in two parts covers key topics of the theory of financial decision making. Some of the papers discuss real applications or case studies as well. There are a number of new papers that have never been published before especially in Part II. Part I is concerned with Decision Making...

Empirical research often requires a method how to convert a deterministic economic theory into an econometric model. A popular method is to add a random error term on the utility scale. This method, however, ignores stochastic dominance. A modification of this method is proposed to account for...