Foundations of Law and Economics
Introductory
Risk Aversion
A preference for a certain outcome over a risky prospect with the same expected monetary value.
Why It Matters
Risk aversion helps explain insurance, settlement, tort damages, investment behavior, portfolio choice, and legal rules that allocate uncertain losses.
Selected Literature
A short list of directly relevant archive entries.
1970
Advanced
1979
Advanced
1996
Advanced
2004
Advanced
Related Cases
1944
Foundations of Law and Economics
Escola v. Coca Cola Bottling Co.
24 Cal. 2d 453, 150 P.2d 436 (1944)
Proof of negligence and the allocation of product-accident risk between manufacturers and consumers.
1707
Foundations of Law and Economics
Keeble v. Hickeringill
11 East 574, 103 Eng. Rep. 1127 (K.B. 1707)
Property protection, malicious interference, and incentives to make productive use of land.
1805
Foundations of Law and Economics
Pierson v. Post
3 Cai. R. 175 (N.Y. Sup. Ct. 1805)
First possession, capture rules, and the administrability of property rights in wild animals.
1854
Foundations of Law and Economics
Hadley v. Baxendale
9 Exch. 341, 156 Eng. Rep. 145 (1854)
Foreseeability, information disclosure, and limits on consequential damages for breach of contract.