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Many results involving expected utility theory call upon the notions of absolute risk aversion, prudence, and/or temperance. This paper exploits a representation of the Friedman–Savage utility premium (Friedman, M., L. J. Savage. 1948. The utility analysis of choices involving risk. J. Political Econom. 56(4) 279–304) to give a general foundation for such coefficients and for their higher-order extensions.
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Denuit et al. (2010) studied this question.
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