Stocks & Commodities V. 23:8 (94): Books For Traders by Technical Analysis, Inc.
Economic And Financial Decisions Under Risk (244 pages, $35 softcover, 2005, ISBN 0-691-12215-6) by
Louis Eeckhoudt, Christian Gollier, and Harris Schlesinger, published by Princeton University Press.
Understanding and dealing with risk is an essential part of modern economics. This book represents a summary of basic multiperiod decision-making under risks. The authors start with the fundamentals of risk measurement and risk aversion, then apply these concepts to insurance decisions and portfolio choice in
a one-period model. The rest of the book is mostly devoted to looking at these decisions in a multiperiod context, which adds the long-term perspective most risk management analyses requires. Each chapter concludes with a discussion of the relevant literature and a set of problems.