When risk tolerance is varied from small to large values in a parametric programming study using CEV as the\nmaxim and, a family of maximum value solutions are obtained that can be compactly summarized in policy region\ntabulations (in the discrete case) or asset allocation tabulations (in the continuous case). This gives the decision\nanalyst an awareness of the full spectrum of solutions, from the one appropriate for the ultra-risk-averse decision\nmaker, to the one appropriate for the risk neutral decision maker. When the interval of uncertainty from the least\nsquare risk tolerance estimation procedure is compared to the policy region tabulation or asset allocation tabulation,\none obtains the solutions that are most preferred by the decision maker whose risk tolerance has just been\nestimated. From these solutions, all optimal in a neighborhood of the estimated risk tolerance, a final solution can be\nselected with complete awareness of what nearby optimal solutions would be like. In addition, for decision analyses\ninvolving an information option, parametric analysis reveals that the risk-averse CEVSI evaluation of information can\nbe substantially greater than the risk neutral EVSI evaluation, which may lead to acquisition of information in cases\nwhere the risk neutral decision maker would pass it by. Hence use of EVSI for buy decisions about information may\nresult in serious underutilization of information, leading to much greater downside risk than would be the case if\nCEVSI were used for those very same information buy decisions.
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