Sunday, January 06, 2008

Risk aversion and ambiguity

Just a quicky - someone has just asked me why I am writing about risk aversion when my main area of expertise is ambiguity.

The quick answer is that risk aversion is usually seen to be part of an individuals level of tolerance to ambiguity. Thus the link in the previous blog about risk aversion being a reaction to uncertainty.The inference being that people who aren't comfortable with ambiguity or uncertainty tend to display risk averse attributes. Therefore risk aversion is an important area of the research on ambiguity.

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