Of risk joy one speaks in the decision theory with an investor, if the safety equivalent of an uncertain disbursement may be larger than the expected disbursement.

In particular the risk premium is negative with a risk-joyful investor.

Formal definition

If a Entscheider has a use function u, then it is risk joyful, if for any uncertain disbursement at a value of X

u (E (X)) \ le E (u (X))

applies.

The Arrow/Pratt measure is negative for a risk-joyful Entscheider.

Practical meaning

One assumes in the decision theory generally investors risikoavers are and rather avoids the risk and/or requires a premium for received risk. However it leaves itself at persons or companies who before a threatening insolvency, frequently to observe that they invest into risky projects, which do not gain the demanded risk premium during original view and which thereby to the day puts a risk-joyful behavior. That is to be attributed to it that they can participate with a success of the project completely at the profit and reorganize themselves over it, in the other case however its creditors a large part of the loss to take over must.

The moreover one one observes the fact that also many actually risikoaverse humans play regularly Lotto although only one part of the incomes as profits is paid and in addition the probability of a high profit is extremely low.

See also: Risk aversion, risk neutrality, expectation use

Articles in category "Risk joy"

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Related Websites

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• Oxford University Press: Adolescents at Risk: Joy G. Dryfoos
  Oxford University Press USA publishes scholarly works in all academic disciplines, bibles, music, children's books, business books, dictionaries, ...


• Oxford University Press: Adolescents at Risk: Joy G. Dryfoos
  Oxford University Press USA publishes scholarly works in all academic disciplines, bibles, music, children's books, business books, dictionaries, ...


• Oxford University Press: Adolescents at Risk: Joy G. Dryfoos
  Oxford University Press USA publishes scholarly works in all academic disciplines, bibles, music, children's books, business books, dictionaries, ...