Abstract
This article demonstrates that exaggerated risk aversion may comprise a rational form of strategic behaviour in the face of asymmetric information. Unlike some other forms of strategic behaviour analysed previously, this behaviour confers a benefit in the form of higher ex post consumption (not merely higher expected consumption or expected utility) and whether or not markets are perfectly competitive.
Original language | English |
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Pages (from-to) | 949-956 |
Journal | Applied Financial Economics |
Volume | 21 |
Issue number | 13 |
DOIs | |
Publication status | Published - 2011 |