Narrow search
Showing 1 - 10 of 325
Cover Image
How changing prudence and risk aversion affect optimal saving
Bauer, Christian; Buchholz, Wolfgang - 2008
We show how optimal saving in a two-period model is affected when prudence and risk aversion of the underlying utility … function change. Increasing prudence alone will induce higher savings only if, for certain combinations of the interest rate …
Persistent link: https://www.econbiz.de/10010264467
Cover Image
Apportioning of risks via stochastic dominance
Eeckhoudt, Louis; Schlesinger, Harris; Tsetlin, Ilia - 2008
Consider a simple two-state risk with equal probabilities for the two states. In particular, assume that the random wealth variable Xi dominates Yi via ith-order stochastic dominance for i = M,N. We show that the 50-50 lottery [XN + YM, YN + XM] dominates the lottery [XN + XM, YN + YM] via (N +...
Persistent link: https://www.econbiz.de/10010264492
Cover Image
Putting risk in its proper place
Eeckhoudt, Louis; Schlesinger, Harris - 2005
This paper examines preferences towards particular classes of lottery pairs. We show how concepts such as prudence and …
Persistent link: https://www.econbiz.de/10010271070
Cover Image
Higher Order Risk Preferences: New Experimental Measures, Determinants and Field Behavior
Schneider, Sebastian O.; Sutter, Matthias - 2020
We use a novel method to elicit and measure higher order risk preferences (prudence and temperance) in an experiment … prudence are strongly related to adolescents' field behavior, including their financial decision making, eco-friendly behavior …, and health status, including addictive behavior. Most importantly, we show that dropping prudence and temperance from the …
Persistent link: https://www.econbiz.de/10012314831
Cover Image
A critique of the literature on the US financial debt crisis
Stein, Jerome L. - 2010
A healthy financial system encourages the efficient allocation of capital and risk. The collapse of the house price bubble led to the financial crisis that started in 2007. There is a large empirical literature concerning the relation between asset price bubbles and financial crises. I evaluate...
Persistent link: https://www.econbiz.de/10010266065
Cover Image
Changes in risk and the demand for saving
Eeckhoudt, Louis; Schlesinger, Harris - 2008
-income risk, second-degree increases in risk require prudence to induce increased saving demand. However, prudence is not …
Persistent link: https://www.econbiz.de/10010264428
Cover Image
Aggressive oil extraction and precautionary saving: Coping with volatility
van der Ploeg, Frederick - 2010
analyzed when the oil demand schedule is linear and preferences quadratic. Without prudence, optimal oil extraction is governed … brings forward oil extraction and induces a bigger government surplus. With prudence, the government depletes oil reserves …
Persistent link: https://www.econbiz.de/10010270525
Cover Image
Closed-Form Integrated Assessment and Uncertainty
Traeger, Christian - 2015
The paper derives the optimal carbon tax in closed-form from an integrated assessment of climate change. The formula shows how carbon, temperature, and economic dynamics quantify the optimal mitigation effort. The model’s descriptive power is comparable to numeric models used in policy...
Persistent link: https://www.econbiz.de/10011307130
Cover Image
Risk aversion, patience and intelligence: evidence based on macro data
Potrafke, Niklas - 2019
Using the new macro data on risk aversion and patience by Falk et al. (2018), I show that risk aversion and patience are related to intelligence: high-IQ populations are more patient and more risk averse than low-IQ populations. The correlation between patience and intelligence corroborates...
Persistent link: https://www.econbiz.de/10012018237
Cover Image
Econographics
Chapman, Jonathan; Dean, Mark; Ortoleva, Pietro; … - 2018
We study the pattern of correlations across a large number of behavioral regularities, with the goal of creating an empirical basis for more comprehensive theories of decision-making. We elicit 21 behaviors using an incentivized survey on a representative sample (n = 1;000) of the U.S....
Persistent link: https://www.econbiz.de/10011931952