Attitudes Toward Risk
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Attitudes Towards Risk: This section covers the three categories of risk attitudes: risk aversion, risk neutrality, and risk preference. As with the previous section, examples are usually the most effective way to make the material accessible to students. It is important to point out that the categories of risk attitudes are simply definitions, not recommendations or theoretical results. Connecting risk attitudes to the shape of the utility function helps make the important point that risk attitudes are simply part of an individual’s utility function.

