Broadly decreasing risk aversion

his paper considers decision-making in the presence of two additive risk so urces, with no restrictions on the relation between the two risks. A utilit y function is said to exhibit broad DARA if and only if a rise in wealth al ways decreases the magnitude of the risk premium for one of the risks vis-a -vis the other. A condition on utility functions giving this property is de rived: utility must be of the linear plus exponential form. It is shown tha t certain problems involving portfolios and risk-averse firms give unambigu ous comparative statics if and only if utility exhibits broad DARA.