This experimental study investigates insurance decisions in low-probability, high-loss risk situations. Results … individuals are risk averse with no specific threshold probability. …

an international investor with constant expenditure shares [alpha, sub j] and constant relative risk aversion [1-gamma … inflation and risk aversion. It is shown that the minimum variance portfolio is independent of returns, but depends on … expenditure patterns. While the speculative portfolio depends on risk aversion and real return differentials. When the effect of …

A main prediction of agency theory is the well known risk-incentive trade-off. Incentive contracts should be found in … environments with little uncertainty and for agents with low degrees of risk aversion. There is an ongoing debate in the literature … use of a unique representative data set, we find clear evidence that risk aversion has a highly significant and …

-range probability than is proposed by the expected utility model and risk-seeking behavior over "long-shot" odds is common …

technology. We use a field experiment with two stages of randomization to generate exogenous variation in the payoffs associated …

asset markets phenomena. In particular, we show that the model can justify the observed equity premium, the low risk free … rate, and the ex-post volatilities of the market return, real risk free rate, and the price-dividend ratio. As in the data … growth rates and growth rate uncertainty--in equilibrium, this leads to a large equity risk premium, low risk free interest …

Higher-beta and higher-volatility equities do not earn commensurately higher returns, a pattern known as the risk … anomaly. In this paper, we consider the possibility that the risk anomaly represents mispricing and develop its implications … for corporate leverage. The risk anomaly generates a simple tradeoff theory: At zero leverage, the overall cost of capital …

Using a laboratory experiment we investigate how skew in uences choices under risk. We find that subjects make …