Unformatted text preview: other possible meaning is that when facing the threat of war, A is ready to agree to a less attractive compromise in order to prevent war than B . The following two deFnitions are analogous to these two interpretations. 1. The preference relation % 1 is more risk averse than % 2 if for any lottery p and degenerate lottery c , p % 1 c implies that p % 2 c . In case the preferences are monotonic, we have a second deFni-tion: 2. The preference relation % 1 is more risk averse than % 2 if CE 1 ( p ) ≤ CE 2 ( p ) for all p ....
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- Fall '10
- Utility, Meaning of life, risk averse, Preorder