Search Theory Risk Preference and Farmland Preservation

1996 ◽  
Vol 25 (1) ◽  
pp. 38-45 ◽  
Author(s):  
Edmund M. Tavernier ◽  
Farong Li ◽  
Tugrul T. Temel
Keyword(s):  
Open Space ◽  
Agricultural Land ◽  
Risk Preference ◽  
Search Theory ◽  
Risk Averse ◽  
Farmland Preservation ◽  
Risk Neutral ◽  
Reservation Prices

This paper uses search theory to examine the role that risk preference (RP) plays in farmland preservation. Assuming that the distribution of the offer price is fixed, the analysis indicates that risk-averse agents have lower reservation prices than risk-neutral agents, and that agricultural land held by the former exits farming at a faster rate. The results also show that farmland preservation policies which increase reservation prices have a greater capitalization effect if agents are risk-loving, and that such policies, while effectively protecting the interest of land speculators, may be less effective in serving the needs of farming and farm-held open space.

Risk Preference and the Interindustry Propensity to Strike

ILR Review ◽  
1983 ◽  
Vol 36 (2) ◽  
pp. 271-285 ◽  
Author(s):  
J. Paul Leigh
Keyword(s):  
Important Determinant ◽  
Strong Support ◽  
Risk Preference ◽  
Manufacturing Industries ◽  
Risk Averse ◽  
Panel Survey ◽  
Income Dynamics ◽  
Injury Rates ◽  
Risk Neutral

This paper presents a model of the determinants of a union's decision to strike. The model states that, assuming management is risk neutral, workers' tastes for risks will be one important determinant of the decision to strike. A risk preference variable from the Panel Survey of Income Dynamics and an injury and illness rate for each of 89 manufacturing industries serve as measures of workers' tastes for risk. The model predicts that industries with high injury rates will experience a disproportionate share of strikes and that a greater share of weakly risk-averse workers will be employed in strike-prone industries than in strike-free industries. The author discovers strong support for the first prediction, but not for the second.

scholarly journals OPTIMAL OUTCOME SHARING WITH A CONSORTIUM OF CONTRACTORS

2015 ◽  
Vol 22 (5) ◽  
pp. 655-665 ◽  
Author(s):  
S. Mahdi HOSSEINIAN ◽  
David G. CARMICHAEL
Keyword(s):  
Risk Aversion ◽  
Risk Attitude ◽  
Risk Averse ◽  
Optimal Outcome ◽  
Original Solution ◽  
Project Outcome ◽  
Risk Neutral ◽  
Current Practices

Where a consortium of contractors is involved, there exist no guidelines in the literature on what the outcome sharing arrangement should be. The paper addresses this shortfall. It derives the optimal outcome sharing arrangement for risk-neutral and risk-averse contractors within the consortium, and between the consortium and a risk-neutral owner. Practitioners were engaged in a designed exercise in order to validate the paper’s propositions. The paper demonstrates that, at the optimum: the proportion of outcome sharing among contractors with the same risk-attitude should reflect the levels of their contributions; the proportion of outcome sharing among contractors with the same level of contribu­tion should be lower for contractors with higher levels of risk aversion; a consortium of risk-neutral contractors should receive or bear any favourable or adverse project outcome respectively; and the proportion of outcome sharing to a con­sortium of risk-averse contractors should reduce, and the fixed component of the consortium fee should increase, when the contractors become more risk-averse or the level of the project outcome uncertainty increases. The paper proposes an original solution to the optimal sharing problem in contracts with a consortium of contractors, thereby contributing to current practices in contracts management.

The stochastic Mitra–Wan forestry model: risk neutral and risk averse cases

2014 ◽  
Vol 115 (2) ◽  
pp. 175-194 ◽  
Author(s):  
Adriana Piazza ◽  
Bernardo K. Pagnoncelli
Keyword(s):  
Risk Averse ◽  
Model Risk ◽  
Risk Neutral

Cutoff Threshold Decisions for Classification Algorithms with Risk Aversion

2021 ◽  
Author(s):  
Andrea C. Hupman
Keyword(s):  
Risk Aversion ◽  
Risk Attitude ◽  
Classification Algorithm ◽  
Classification Algorithms ◽  
Risk Averse ◽  
Optimal Cutoff ◽  
Data Set ◽  
Risk Neutral ◽  
Bayes Algorithm ◽  
Cutoff Threshold

Classification algorithms predict the class membership of an unknown record. Methods such as logistic regression or the naïve Bayes algorithm produce a score related to the likelihood that a record belongs to a particular class. A cutoff threshold is then defined to delineate the prediction of one class over another. This paper derives analytic results for the selection of an optimal cutoff threshold for a classification algorithm that is used to inform a two-action decision in the cases of risk aversion and risk neutrality. The results provide insight to how the optimal cutoff thresholds relate to the associated costs and the sensitivity and specificity of the algorithm for both the risk neutral and risk averse decision makers. The optimal risk averse threshold is not reliably above or below the optimal risk neutral threshold, but the relation depends on the parameters of a particular application. The results further show the risk averse optimal threshold is insensitive to the size of the data set or the magnitude of the costs, but instead is sensitive to the proportion of positive records in the data and the ratio of costs. Numeric examples and sensitivity analysis derive further insight. Results show the percent value gap from a misspecified risk attitude increases as the specificity of the classification algorithm decreases.

Farmland Preservation Verdicts-Rezoning Agricultural Land in British Columbia

2011 ◽  
Vol 59 (4) ◽  
pp. 555-572 ◽  
Author(s):  
Tracy E. Stobbe ◽  
Alison J. Eagle ◽  
Geerte Cotteleer ◽  
G. Cornelis van Kooten
Keyword(s):  
British Columbia ◽  
Agricultural Land ◽  
Farmland Preservation

Connection Function and its Posture Analysis of Risk Preference

2013 ◽  
Vol 756-759 ◽  
pp. 1784-1787
Author(s):  
Ya Feng Yang ◽  
Huan Cheng Zhang ◽  
Li Nan Shi
Keyword(s):  
Risk Aversion ◽  
Decision Analysis ◽  
Utility Function ◽  
Risk Preference ◽  
Posture Analysis ◽  
Connection Degree ◽  
Risk Neutral

To make utility function reflect the comprehensive utility of things and decision, and consider the uncertainty in the decision analysis and things acknowledge, a deeply analysis of the set pair character of utility function is carried on from three aspects: risk aversion, risk neutral and risk pursuit, and then the set pair connection function of risk preference was constructed. Finally, the posture of preference connection degree was discussed.

Risk neutral and risk averse Stochastic Dual Dynamic Programming method

2013 ◽  
Vol 224 (2) ◽  
pp. 375-391 ◽  
Author(s):  
Alexander Shapiro ◽  
Wajdi Tekaya ◽  
Joari Paulo da Costa ◽  
Murilo Pereira Soares
Keyword(s):  
Dynamic Programming ◽  
Programming Method ◽  
Dynamic Programming Method ◽  
Risk Averse ◽  
Stochastic Dual Dynamic Programming ◽  
Risk Neutral ◽  
Dual Dynamic Programming

scholarly journals Optimal Risk Budgeting under a Finite Investment Horizon

Risks ◽  
2019 ◽  
Vol 7 (3) ◽  
pp. 86
Author(s):  
Marcos López de Prado ◽  
Ralph Vince ◽  
Qiji Jim Zhu
Keyword(s):  
Quantitative Methods ◽  
Optimal Portfolio ◽  
Investment Horizon ◽  
Risk Averse ◽  
Growth Optimal Portfolio ◽  
Risk Budgeting ◽  
Risk Parity ◽  
Risk Neutral ◽  
Mean Variance

The Growth-Optimal Portfolio (GOP) theory determines the path of bet sizes that maximize long-term wealth. This multi-horizon goal makes it more appealing among practitioners than myopic approaches, like Markowitz’s mean-variance or risk parity. The GOP literature typically considers risk-neutral investors with an infinite investment horizon. In this paper, we compute the optimal bet sizes in the more realistic setting of risk-averse investors with finite investment horizons. We find that, under this more realistic setting, the optimal bet sizes are considerably smaller than previously suggested by the GOP literature. We also develop quantitative methods for determining the risk-adjusted growth allocations (or risk budgeting) for a given finite investment horizon.

scholarly journals User Equilibrium Analysis Considering Travelers’ Context-Dependent Route Choice Behavior on the Risky Traffic Network

2020 ◽  
Vol 12 (17) ◽  
pp. 6706
Author(s):  
Qinghui Xu ◽  
Xiangfeng Ji
Keyword(s):  
High Probability ◽  
Choice Behavior ◽  
Route Choice ◽  
User Equilibrium ◽  
Equilibrium Analysis ◽  
Risk Averse ◽  
Risk Seeking ◽  
Route Choice Behavior ◽  
Risk Neutral ◽  
Context Dependent

This paper studies travelers’ context-dependent route choice behavior in a risky trafficnetwork from a long-term perspective, focusing on the effect of travelers’ salience characteristics. In particular, a flow-dependent salience theory is proposed for this analysis, where the flow denotes the traffic flow on the risky route. In the proposed model, travelers’ attention is drawn to the salient travel utility, and the objective probabilities of the state of the world are replaced by the decision weights distorted in favor of this salient travel utility. A long-run user equilibrium will be achieved when no traveler can improve his or her salient travel utility by unilaterally changing routes, termed salient user equilibrium, which extends the scope of the Wardropian user equilibrium. Furthermore, we prove the existence and uniqueness of this salient user equilibrium. Finally, numerical studies demonstrate our theoretical findings. The equilibrium results show non-intuitive insights into travelers’ route choice behavior. (1) Travelers can be risk-seeking (the travel utility of a risky route is small with a relatively high probability), risk-neutral (in special situations), or risk-averse (the travel utility of a risky route is large with a relatively high probability), which depends on the salient state. (2) The extent of travelers’ risk-seeking or risk-averse behavior depends on their extent of salience bias, while the risk-neutral behavior is irrelative to this salience bias.

scholarly journals Urban Growth and the Taxation of Agricultural Land in the Northeast

1973 ◽  
Vol 2 (1) ◽  
pp. 48-57
Author(s):  
Donald J. Epp
Keyword(s):  
World War Ii ◽  
Open Space ◽  
Agricultural Land ◽  
State Legislatures ◽  
The United States ◽  
Rapid Decline ◽  
World War ◽  
Rapid Population Growth ◽  
The Public ◽  
Considerable Concern

The rapid population growth of the United States and the well documented concentration of that population into a few major metropolitan areas has caused significant amounts of land to shift from agricultural to urban uses. Since World War II, the shifts in land use have caused considerable concern in the Northeast, particularly in those states containing parts of the BosWash megolopolis. Concern over the loss of open space land and the rapid decline in agricultural firms led several state legislatures to consider methods of halting, or at least controlling, the spread of cities into the rural hinterland. Maryland was the first state to pass legislation to protect open space and agriculture, enacting its law in 1955. Connecticut followed with its law in 1963 and New Jersey in 1964. All of these legislative acts declare that it is in the public interest to preserve open space lands, including farms and forests. The wording may vary from state to state but the intent is clear. These legislatures were trying to hold land in open space uses, or at least to avoid forcing their conversion because of high taxes.

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