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Risk Attitude and Time Discounting

If you prefer $50 for sure to a 50% chance of $100, then you are risk-averse. Cher, Miyamoto, and Lenert show how the deceptively simple concept of risk aversion has major implications for Markov models of medical decisions.1 Their risk-adjusted quality-adjusted life year (RA-QALY) model differs from usual Markov models in two ways. First, Cher et al. include a risk-attitude parameter to correct for the fact that utilities inferred from time-tradeoff