Most of the columns in this "Anomalies" series have discussed empirical results that
, if taken at face value, immediately strike economists as violations of the standard economic model. Risk aversion, the topic of this entry in the series, is rather different. Here the behavior we will point to-the hesitation over risky monetary prospects even when they involve an expected gain-will not strike most economists as surprising. Indeed, economists have a simple and elegant explanation for risk aversion: It derives from expected utility maximization of a concave utilityof-wealth function. This model is used ubiquitously in theoretical and empirical economic research. Despite its central
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