Template-type: ReDif-Paper 1.0
Author-Name: Berden Caroline 
Author-Name: Peters Hans 
Author-workplace-name: METEOR
Title: On the effect of risk aversion in two-person, two-state finance economies
Abstract: The effect of replacing an agent in a two-person two-state finance economy by a more risk averse agent is studied. It is established under which conditions the other agent benefitsor looses in equilibrium from dealing with a more risk averse agent. If one agent becomes more risk averse, then the equilibrium allocation moves towards that agent''s certainty line. Whether or not that is beneficial for the other agent, depends on the location of the endowment point.
Keywords: microeconomics ; 
Series: Research Memoranda
Creation-Date: 2006
Number: 011
File-URL: http://digitalarchive.maastrichtuniversity.nl/fedora/objects/guid:b0e41adc-56f5-46ab-af36-325a6c4dcb8c/datastreams/ASSET1/content
File-Format: application/pdf
File-Size: 143920
Handle: RePEc:unm:umamet:2006011