Economic Theory

, Volume 30, Issue 2, pp 337–362

A contribution to duality theory, applied to the measurement of risk aversion

Research Article

DOI: 10.1007/s00199-005-0053-7

Cite this article as:
Martínez-Legaz, J.E. & Quah, J.K.H. Economic Theory (2007) 30: 337. doi:10.1007/s00199-005-0053-7


This paper determines the precise connection between the curvature properties of an objective function and the ray-curvature properties of its dual. When the objective function is interpreted as a Bernoulli or cardinal utility function, our results characterize the relationship between an agent’s attitude towards income risks and her attitude towards risks in the underlying consumption space. We obtain these results by developing and applying a number of representation theorems for concave functions.


Risk aversionConcavityDualityHomotheticityCost curves

JEL Classification Numbers


Copyright information

© Springer-Verlag 2005

Authors and Affiliations

  1. 1.Department d’Economia i d’Història EconòmicaUniversitat Autònoma de BarcelonaBellaterraSpain
  2. 2.Department of EconomicsOxford UniversityOxfordUK