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| | The writer's name is Christy Brookins. Invoicing is my profession. It's not a common thing but what I like performing is to climb but I don't have the time lately. My spouse and I reside in Mississippi but now I'm considering other options.<br><br>Have a look at my web-site - best psychic readings ([http://formalarmour.com/index.php?do=/profile-26947/info/ http://formalarmour.com/index.php?do=/profile-26947/info/]) |
| In [[economics]] and [[finance]], a '''risk-seeker''' or '''risk-lover''' is a person who has a preference ''for'' [[risk]]. While most [[investment|investors]] are considered [[risk averse|risk ''averse'']], one could view casino-goers as risk-seeking. If offered either $50 or a 50% each chance of either $100 or nothing, a risk-seeking person would prefer the gamble even though the gamble and the sure thing have the same [[expected value]]. In fact, the risk lover would be indifferent to accepting a less than 50% chance of $100 versus the sure $50 (how much less would depend on how risk loving the person is). The risk lover would also be indifferent between a 50% chance of each of $X and nothing versus the sure $50, where $X is some amount less than $100 (again, how much less would depend on how risk loving the person is).
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| Risk-seeking behavior can be observed in the negative domain <math>x<0</math> for [[prospect theory]] value functions, where the functions are convex for <math>x<0</math> but concave for <math>x>0</math>.
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| ==The risk-seeking utility function== | |
| Choice under uncertainty is often characterized as the maximization of [[expected utility]]. Utility is often assumed to be a function of profit or final portfolio wealth, with a positive first [[derivative]]. The utility function whose expected value is maximized is [[convex function|convex]] for a risk-seeker, [[concave function|concave]] for a risk-averse agent, and linear for a [[risk neutral|risk-neutral]] agent. Its convexity in the risk-seeking case has the effect of causing a [[mean-preserving spread]] of any [[probability distribution]] of wealth outcomes to be preferred over the unspread distribution.
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| {{DEFAULTSORT:Risk-seeking}}
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| [[Category:Business economics]]
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| [[Category:Risk]]
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| [[Category:Prospect theory]]
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| [[Category:Financial risk]]
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| [[Category:Economics of uncertainty]]
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| [[Category:Utility]]
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| [[Category:Personality]]
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| {{Finance-stub}}
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Latest revision as of 19:46, 7 January 2015
The writer's name is Christy Brookins. Invoicing is my profession. It's not a common thing but what I like performing is to climb but I don't have the time lately. My spouse and I reside in Mississippi but now I'm considering other options.
Have a look at my web-site - best psychic readings (http://formalarmour.com/index.php?do=/profile-26947/info/)