If someone has strictly convex preferences between all contingent commodity bundles, then he or she must be risk averse.

Question

Quizplus · Accepted Answer

A person with strictly convex preferences would exhibit diminishing marginal utility and therefore be risk averse. This is because they would prefer a certain outcome over a risky one with the same expected value due to the additional utility gained from the certainty of the outcome.

If Someone Has Strictly Convex Preferences Between All Contingent Commodity