{"schema":"https://ver.cy/schemas/card/1.0.0","id":"vr.tr.risk-aversion","code":"thing-q1426675","url":"https://ver.cy/models/thing/q1426675/","name":"risk aversion","alternateNames":["Hyperbolic absolute risk aversion"],"kind":"thing","status":"research-draft","version":"0.2.0-wave.2","language":"en","classifiers":{"family":"Thing Registry","category":"Cross-cutting context","entryKind":"thing","plane":"XCT","domain":["XCT.QTY"],"industry":[],"navPath":"","tags":[],"facets":{}},"whatItIs":"The tendency of a person or organisation to prefer a certain outcome over a risky one with the same or higher expected value, formalised in economics and decision theory through utility functions and measures such as absolute and relative risk aversion, including hyperbolic absolute risk aversion; risk aversion shapes insurance, investment, negotiation and policy choices.","purpose":"Let an agent explain risk aversion and its measures, describe how it is estimated and used, relate it to behavioural findings, and provide general information without personal financial advice.","scope":{"in":[],"out":[],"boundaries":[]},"distinguishingFeatures":["Preference over uncertainty","Utility-based","Measurable","Decision-relevant"],"structure":{"bundles":[{"id":"concept","name":"Concept","description":"What risk aversion is.","layers":[{"id":"definition","name":"Definition","description":"Definition and utility.","findings":[{"id":"definition-finding","name":"Definition","description":"Definition.","questions":[{"text":"How is risk aversion defined through expected utility and concave utility functions?","kind":"definition"},{"text":"How do risk aversion, risk neutrality and risk seeking differ?","kind":"definition"}]}]},{"id":"measures","name":"Measures","description":"Measures.","findings":[{"id":"measures-finding","name":"Measures","description":"Measures.","questions":[{"text":"What are the Arrow-Pratt measures of absolute and relative risk aversion, and what is hyperbolic absolute risk aversion?","kind":"definition"},{"text":"How are they computed for a given utility function?","kind":"action"}]}]}]},{"id":"estimate","name":"Estimate","description":"Measuring preferences.","layers":[{"id":"methods","name":"Methods","description":"Elicitation methods.","findings":[{"id":"methods-finding","name":"Methods","description":"Methods.","questions":[{"text":"How is risk aversion estimated from choices, surveys and market data?","kind":"provenance"},{"text":"How stable is it across contexts?","kind":"boundary"}]}]},{"id":"behaviour","name":"Behaviour","description":"Behavioural findings.","findings":[{"id":"behaviour-finding","name":"Behaviour","description":"Behaviour.","questions":[{"text":"How do prospect theory, loss aversion and framing modify the standard picture, according to research?","kind":"provenance"},{"text":"Which findings are contested?","kind":"boundary"}]}]}]},{"id":"apply","name":"Apply","description":"Uses.","layers":[{"id":"finance","name":"Finance","description":"Finance and insurance.","findings":[{"id":"finance-finding","name":"Finance","description":"Finance.","questions":[{"text":"How is risk aversion used in portfolio theory, insurance demand and risk profiling by regulated advisers?","kind":"provenance"},{"text":"Is the user seeking personal investment advice, which needs a licensed adviser?","kind":"boundary"}]}]},{"id":"policy","name":"Policy","description":"Policy and organisations.","findings":[{"id":"policy-finding","name":"Policy","description":"Policy.","questions":[{"text":"How does risk aversion inform public policy, safety regulation and organisational risk appetite?","kind":"provenance"},{"text":"How do organisations state risk appetite?","kind":"provenance"}]}]}]},{"id":"learn","name":"Learn","description":"Teaching.","layers":[{"id":"teach","name":"Teach","description":"Teaching risk aversion.","findings":[{"id":"teach-finding","name":"Teach","description":"Teaching.","questions":[{"text":"How can risk aversion be taught with lotteries and utility curves?","kind":"action"},{"text":"Which misconceptions arise?","kind":"provenance"}]}]},{"id":"history","name":"History","description":"History.","findings":[{"id":"history-finding","name":"History","description":"History.","questions":[{"text":"How did the concept develop from Bernoulli to Arrow and Pratt and to behavioural economics?","kind":"provenance"},{"text":"Which references are standard?","kind":"provenance"}]}]}]}]},"agentConduct":{"may":["Explain risk aversion and its measures, citing economics and decision theory.","Help a person describe their own risk preferences before they seek advice."],"mustNot":["Give personal investment advice based on a person's risk aversion.","Confuse risk aversion with loss aversion.","Use a person's measured risk preferences to manipulate them into products.","Present a single measure as a complete picture of a person's preferences."],"requiresHuman":["Investment, insurance or pension decisions for a person."]},"ethics":{"considerations":["Risk profiles are used to sell products, sometimes against people's interests.","Attitudes to risk differ by wealth and circumstance; judging them is unfair."],"affectedParties":["Investors and savers","Insurance customers","Students"]},"owners":{"steward":"Nobody: a concept of economics held in common.","roles":[],"masterSystems":[]},"relations":[{"target":"Q13631330","type":"parent","note":"registry parent class"},{"target":"Q2822674","type":"parent","note":"registry parent class"},{"target":"risk appetite","type":"related","note":"category"},{"target":"aversion","type":"related","note":"category"},{"target":"liquid assets","type":"related","note":"portfolio choices"},{"target":"nondiscretionary trust","type":"related","note":"investment vehicles"}],"interaction":{"identity":{"applicability":"required","items":["Vercy registry: vr.tr.risk-aversion","Wikidata: Q1426675 (https://www.wikidata.org/wiki/Q1426675)"]},"properties":{"applicability":"not-applicable","items":[]},"recognition":{"applicability":"optional","items":["Prefers certainty over equal-expected-value gambles","Concave utility","Risk seeking and risk neutrality are alternatives","Not physical; a preference pattern."]},"capabilities":{"applicability":"required","items":["explain risk aversion and its measures","describe estimation and uses","relate to behavioural economics","avoid personal advice"]},"hazards":{"applicability":"required","items":["Confusing risk aversion with loss aversion","Mismeasuring preferences","Agents giving personal investment advice"]},"interfaces":{"applicability":"required","items":["Suitability and risk profiling rules in financial regulation","No regulation of the concept itself"]},"context":{"applicability":"required","items":["Attitudes toward risk in decisions.","absolute risk aversion","relative risk aversion","hyperbolic absolute risk aversion","loss aversion (related behavioural concept)","ambiguity aversion (related)"]}},"sources":[],"openQuestions":["Should loss aversion be a separate entry?","How should survey instruments be linked?","How should regulatory profiling rules be linked?"],"resources":{"spec":"/models/things/publications/thing-q1426675/spec.json"},"provenance":{"origin":"thing registry research (pass 2)","builtFrom":["models/things/publications/thing-q1426675/spec.json"],"providers":["Claude"],"researchStatus":"unreviewed","generatedAt":"2026-09-11T21:45:44Z","builder":"tools/build_cards.py@1.0.0"},"completeness":{"sections":{"classifiers":"filled","whatItIs":"filled","purpose":"filled","distinguishingFeatures":"filled","structure":"filled","agentConduct":"filled","ethics":"filled","owners":"filled","relations":"filled","interaction.identity":"filled","interaction.properties":"not-applicable","interaction.recognition":"filled","interaction.capabilities":"filled","interaction.hazards":"filled","interaction.interfaces":"filled","interaction.context":"filled","sources":"missing"},"notes":{"interaction.properties":"Plane XCT: no invented physical properties.","sources":"Written from model knowledge without web access; claims are unverified."},"score":0.938}}