Hyperbolic absolute risk aversion

In finance, economics, and decision theory, hyperbolic absolute risk aversion (HARA) refers to a type of risk aversion that is particularly convenient to model mathematically and to obtain empirical predictions from. It refers specifically to a property of von Neumann–Morgenstern utility functions, which are typically functions of final wealth (or some related variable), and which describe a decision-maker's degree of satisfaction with the outcome for wealth. The final outcome for wealth is affected both by random variables and by decisions. Decision-makers are assumed to make their decisions (such as, for example, portfolio allocations) so as to maximize the expected value of the utility function.

Notable special cases of HARA utility functions include the quadratic utility function, the exponential utility function, and the isoelastic utility function.

A utility function is said to exhibit hyperbolic absolute risk aversion if and only if the level of risk tolerance ${\displaystyle T(W)}$—the reciprocal of absolute risk aversion ${\displaystyle A(W)}$—is a linear function of wealth W:

...
Wikipedia