Prospect theory predicts that loss averse agents who fear they will not reach their reference utility level are more apt to adopt risky strategies to avoid that painful possibility compared to agents who are more sure of their relative standing. This paper tests this theory with data from...

This paper interprets Knight’s views of the firm from the standpoint of his theory of human agency. Focusing on the coordination perspective, this paper argues that Knightian firms are institutions which deal with intersubjective uncertainty. The fundamental principle underlying an organized...

Purpose – While behavioral economic experiments have uncovered a wealth of insights concerning how people decide in the face of risk and uncertainty, the implications of these insights for the demand for agricultural insurance are under-explored. The purpose of this paper is to report on...

Purpose The purpose of this paper is to benchmark alternatives of decision problems that include risk and uncertainty considering different risk attitudes via a new data envelopment analysis (DEA) decision model. Design/methodology/approach A new utility function of strict bounds is applied in a...

During production processes there is an accumulation of uncertainty aboutproduction and its output. However, decision-makers can reduce uncertainty bytaking measuremens. The role of value of measurements is discussed in adynamic production framework where the number of measurements depends on...

Few theoretically-consistent empirical models addressing the relationship between ambiguity, risk, and preferences for health and safety exist. To fill this gap, we propose a theoretical non-expected-utility model (NEUM) that is relatively easy to estimate using an interval-data model. The NEUM...

Technology involving genetic modification of crops has the potential to make a contribution to rural poverty reduction in many developing countries. Thus far, insecticide-producing 'Bt' varieties of cotton have been the main GM crops under cultivation in developing nations. Several studies have...

Home bias arises when the actual portfolio of an investor consists of a smaller proportion of foreign assets than that predicted by standard portfolio theory for the observed set of risks and returns on available assets. The existence and persistence of home bias undermines the theoretical case...

Quarantine policy reviews are becoming more sophisticated following the Uruguay Round’s Agreement on Sanitary and Phytosanitary (SPS) Measures and, in Australia’s case, following also the 1996 Nairn Report. Yet they still focus primarily on the effects of restrictions just on...