Affiliation: | (1) Busan Development Institute, Busan, 601-720, Republic of Korea;(2) Department of Economics and Management Research Institute, Chonnam National University, Gwangju, 500-757, Republic of Korea |
Abstract: | This paper proposes a new concept, a left-side relatively weak increase in risk (L-RWIR) order, that extends the definition of a relatively weak increase in risk (RWIR) order. We show that, for the class of linear payoffs, one can obtain an appealing comparative statics result for L-RWIR shifts imposing additional restrictions on risk preferences of a risk-averse decision maker.JEL classification: D81.revised version received October 10, 2003Acknowledgements The authors would like to thank an anonymous referee for insightful comments and useful suggestions. |