The decomposition of risk in denumerable populations with ex ante identical individuals

Article Abstract:

A method for decomposing risk into an aggregate and a unique segment which avoids the problems related to continuums of random variables is presented. It is argued that a denumerable population is more appropriate for approximating a large finite economy and that zero weight can be ascribed to any finite number of agents in this condition. This analysis demonstrates that a highly accurate decomposition of risk is possible in this framework and identifies the sigma-field of aggregate events. Findings formalize basic arguments that are hard to prove in the continuum context.

Analysis, Risk (Economics), Decomposition method

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Continuous approximation of dynamical systems with randomly matched individuals

Article Abstract:

The random matching strategy used by both biologists and economists when dealing with population statistics is analyzed in relation to constraints such as the case of a growing population. The matching strategy is quite complex and users are forced to use a deterministic procedure to approximate results. A differential equation is formulated to cope with the given constraints.

Research, Models, Population, Matching theory

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Relative risk aversion, relative prudence and comparative statics under uncertainty: The case of (mu,theta )preferences

Article Abstract:

The magnitudes of relative prudence and relative risk aversion are characterized in terms of the mean-standard, two-parameter approach, which is compared and contrasted with the expected-utility approach.

Venture Analysis, Usage, Comparative analysis, Average, Mean (Statistics), Utility theory, Utility functions

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