Studies from University of Bonn Describe New Findings in Risk Management (On Social Preferences and the Intensity of Risk Aversion)

2019 SEP 02 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Current study results on Risk Management have been published. According to news reporting originating in Bonn, Germany, by NewsRx editors, the research stated, “We study the relative risk aversion of an individual with particular social preferences: his wellbeing is influenced by his relative wealth, and by how concerned he is about having low relative wealth.”

The news reporters obtained a quote from the research from the University of Bonn, “Holding constant the individual’s absolute wealth, we obtain two results. First, if the individual’s level of concern about low relative wealth does not change, the individual becomes more risk averse when he rises in the wealth hierarchy.”

According to the news reporters, the research concluded: “Second, if the individual’s level of concern about low relative wealth intensifies when he rises in the wealth hierarchy and if, in precise sense, this intensification is strong enough, then the individual becomes less risk averse: the individual’s desire to advance further in the wealth hierarchy is more important to him than possibly missing out on a better rank.”

For more information on this research see: On Social Preferences and the Intensity of Risk Aversion. Journal of Risk and Insurance, 2019;86(3):807-826. Journal of Risk and Insurance can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA. (Wiley-Blackwell - http://www.wiley.com/; Journal of Risk and Insurance - http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1539-6975)

Our news correspondents report that additional information may be obtained by contacting O. Stark, University of Bonn, Bonn, Germany.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1111/jori.12239. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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