American Economic Review: Vol. 103 No. 4 (June 2013)
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Even (Mixed) Risk Lovers Are Prudent: Comment
Ebert, Sebastian. 2013. "Even (Mixed) Risk Lovers Are Prudent: Comment." American Economic Review, 103(4): 1536-37.
Crainich, Eeckhoudt, and Trannoy (2013) show that mixed risk lovers are prudent. I show that common risk loving utility functions may not exhibit mixed risk lovingâ€“â€“as is typical for risk aversion and mixed risk aversionâ€“â€“and thus these traits should be carefully distinguished. In particular, risk lovers may be imprudent.
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Ebert, Sebastian (Institute for Financial Economics and Statistics, U Bonn)
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