uninsured capital income risk, and suffer from an information-processing capacity constraint. For given attention devoted to … capital income risk, we solve for the optimal consumption-saving choices and show that the expected welfare is increasing with … capacity, assuming a relative risk aversion degree larger than unity. Furthermore, we solve for attention choice and find that …

first-order approximated solution built by perturbation methods accounts for risk. We show that risk matters economically in … a real business cycle (RBC) model with habit formation and capital adjustment costs and that neglecting risk leads to …

This paper investigates whether limited liability and moral hazard affect risk-taking through motivated beliefs. On the … subjects form motivated beliefs to self-justify their excessive risk-taking. For the same investment opportunity, subjects …

of savings, precautionary savings, loss aversion, and risk. We provide the relevant theory, followed by empirical tests …

insurance product. We also find that WICI has a positive and statistically significant effect on farmers' real-life risk …This study examines the effect of smallholder farmers' access to a formal climate risk transfer mechanism on their risk … insurance (WICI) in Ethiopia. We use an endogenous switching (ESP) model to address self-selection and simultaneity bias …

assumption of (intertemporal) risk neutrality reduces the growth effect in social discounting and significantly amplifies the … importance of risk and correlation. Second, debate and models largely overlook the difference in attitude with respect to risk … and with respect to non-risk uncertainty. The paper derives the resulting changes of the risk-free and the stochastic …

solution. Then we consider a monopoly. Market power affects both output and sugar content, possibly in opposite directions, and …