Hmm. I think you’re right: I’ve never connected the terms in that way, using “risk-neutral” in tems of utility rather than money. Looking at it more closely, it appears it’s more commonly used for money, which would be risk-seeking in terms of utility, and probably non-optimal. (note: I also recognize that most people, including me, over-estimate the decline massively, and for small wagers it should be very close to linear).
The standard meaning of “risk-{adverse, neutral, seeking} in terms of X”, AFAICT, is that your utility is a {concave downward, linear, concave upward} function of X, and hence you cannot be risk-adverse or risk-seeking in terms of utility (assuming the von Neumann-Morgenstern axioms).
Hmm. I think you’re right: I’ve never connected the terms in that way, using “risk-neutral” in tems of utility rather than money. Looking at it more closely, it appears it’s more commonly used for money, which would be risk-seeking in terms of utility, and probably non-optimal. (note: I also recognize that most people, including me, over-estimate the decline massively, and for small wagers it should be very close to linear).
The standard meaning of “risk-{adverse, neutral, seeking} in terms of X”, AFAICT, is that your utility is a {concave downward, linear, concave upward} function of X, and hence you cannot be risk-adverse or risk-seeking in terms of utility (assuming the von Neumann-Morgenstern axioms).