IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-04703428.html
   My bibliography  Save this paper

Self-Protection with Multiplicative Foreground and Background Risks

Author

Listed:
  • Christoph Heinzel

    (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement, INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

Occasional treatments of self-protection in relation to multiplicative risk highlight differences to additive risk. This paper studies the prevalence, sources, and implications of such differences along various modeling features. Preference conditions vary as soon as the foreground risk component in the utility argument is multiplicative to mitigation effort or background risk. Only models with mitigation cost in utility terms and no background risk show no structural difference. In a numerical example for monetary cost, the same decision maker, who raises loss-risk mitigation with additive background risk, uniformly reduces mitigation with background risk, whenever multiplicative risk is present, in the foreground or the background.

Suggested Citation

  • Christoph Heinzel, 2024. "Self-Protection with Multiplicative Foreground and Background Risks," Post-Print hal-04703428, HAL.
    • Handle: RePEc:hal:journl:hal-04703428
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-04703428. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.