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 …

intergenerational inequality aversion and for risk aversion. If growth increases (reduces) intra-generational inequality, the SDR is …

information. Respondents who learn of a higher personal exposure to unemployment risk during recessions increase their demand for … rational inattention that demand for information depends on its expected benefit. Moreover, the fact that perceived risk …

their individual risk aversion. They choose between a fundamentalist and a trend-following rule to form expectations about … the price of a risky asset. Given their risk aversion, agents make a deterministic trade-off between mean and variance … both in choosing a forecasting heuristic and determining the number of risky assets to buy. Heterogeneous risk preferences …

Under conditions of risk it makes a difference whether the discount rate is determined as an expected present or as an …

We define a class of risk-taking-neutral (RTN) background risks. These background risks have the property that they … will not alter decisions made with respect to another risk, for individuals with HARA utility. If we wish to compare a … decision made with and without some exogenous background risk, it is often easier to compare the decision made to one made with …

suggested by theory. This evidence is robust to different model specifications and econometric techniques as well as to the …