The optimal response to an uncertain negotiation is risk sharing if:
A) both parties are risk lovers.
B) both parties are risk averse.
C) one party is risk averse and the other is risk neutral.
D) one party is a risk lover and the other is risk neutral.
E) both parties are risk neutral.

Question

Quizplus · Accepted Answer

Risk sharing is most beneficial when both parties are risk averse, as it allows them to mitigate potential losses by distributing the risk between them. This approach can lead to a more stable and agreeable outcome for both sides.

The Optimal Response to an Uncertain Negotiation Is Risk Sharing