Remember that risk aversion does not exist in a value-vacuum. In normal circumstances you are risk averse in money because your first $100 is more valuable than your last $100. You have to solve the problem that wei_dai brought up in order to explain why you would be risk averse in #’s of simulations running.
Remember that risk aversion does not exist in a value-vacuum. In normal circumstances you are risk averse in money because your first $100 is more valuable than your last $100. You have to solve the problem that wei_dai brought up in order to explain why you would be risk averse in #’s of simulations running.