Risk aversion generally occur when your subjective utility with respect to some quantity X is monotonically but sublinearly increasing.
In most economic analysis X is generally considered to be money, but it can be really anything else, including years spent in utopia.
Risk aversion generally occur when your subjective utility with respect to some quantity X is monotonically but sublinearly increasing.
In most economic analysis X is generally considered to be money, but it can be really anything else, including years spent in utopia.