Kusuoka representation of higher order dual risk measures

Darinka Dentcheva, Spiridon Penev, Andrzej Ruszczyński

Research output: Contribution to journalArticlepeer-review

25 Scopus citations

Abstract

We derive representations of higher order dual measures of risk in Lp spaces as suprema of integrals of Average Values at Risk with respect to probability measures on (0,1] (Kusuoka representations). The suprema are taken over convex sets of probability measures. The sets are described by constraints on the dual norms of certain transformations of distribution functions. For p=2, we obtain a special description of the set and we relate the measures of risk to the Fano factor in statistics.

Original languageEnglish
Pages (from-to)325-335
Number of pages11
JournalAnnals of Operations Research
Volume181
Issue number1
DOIs
StatePublished - Dec 2010

Keywords

  • Average value at risk
  • Coherent measures of risk
  • Duality
  • Fano factor
  • Lorenz curve
  • Optimization
  • Quantile functions

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