An article about Kihlstrom and Mirman about comparative risk aversion with many goods is critiqued. If "more risk … averse" is interpreted as signifying that an individual is less willing to accept a median-preserving spread, then risk … individual has a greater directional risk premium, then risk aversion may be compared across individuals with different …

This chapter of a collective book aims at presenting the basics of decision making under risk. We first define notions … of risk and increasing risk and recall definitions and classifications (that are valid independently of any … representation) of behavior under risk. We then review the classical model of expected utility due to von Neumann and Morgenstern …

heterogeneity. Investors may dier in their beliefs, in their level of risk aversion and in their time preference rate. We study the … market price of risk, the risk free rate, the bond prices at dierent maturities, the stock price and volatility as well as …