ABSTRACT
In order to make a decision, we assemble information, analyse it and interpret the results. Interpretation of information or analytical results is influenced, among other things, by professional experience, the quality of our judgement, our knowledge of subjective information-which may not have been included in the analysis-and our attitude to the problem under consideration. This chapter is about personal and corporate attitudes to risk. We shall begin by returning to a theme introduced in Chapter 2-gambler’s risk aversion-and shall then present some basic ideas about the range, and apparent irrationality, of risk attitudes.
