Loss aversion, risk aversion, and the probability weighting function (PWF) are three central concepts in explaining …/tolerant stochastic reference dependence and optimism/pessimism over probability distributions. I give a preference interpretation to … extend to distinct PWFs in the gain and loss domains, as under prospect theory …

Two non-transitive theories to model decision making under risk are regret theory (Loomes and Sugden, 1982, 1987) and … salience theory (Bordalo, Gennaioli, and Shleifer, 2012). While the psychological underpinning of these two approaches is … of choice behavior. We investigate the overlap between these theories and show that original regret theory (Loomes and …

This paper investigates the effect of economic policy uncertainty (EPU) on gambling activity in China. Based on a …

This paper introduces a formal definition and an experimental measurement of the concept of cognitive uncertainty …: people's subjective uncertainty about what the optimal action is. This concept allows us to bring together and partially … experiments and surveys tends to be insensitive to variation in probabilities, as in the classical probability weighting function …

premium. Key for this result are endogenous fluctuations in uncertainty which induce procyclical variations in agent's nowcast …

How does economic uncertainty affect the impact of tax policy? We exploit a natural experiment in which two very …, and once during a period of very high uncertainty. Exploiting sharp discontinuities in eligibility and using rich … administrative data, we find that firms exposed to high uncertainty decide to "wait and see" before investing, despite generous …

We analyse the extent to which firm-level uncertainty is affected by aggregate uncertainty. Firm-level uncertainty is … constructed from a large and monthly panel dataset of manufacturing firms. We find that aggregate uncertainty has a positive and … robust impact on firm-level uncertainty. This effect holds across different types of domestic and international measures of …

When agents’ information is imperfect and dispersed, existing measures of macroeconomic uncertainty based on the … dispersion. The former driver increases uncertainty and reduces agents’ disagreement (agreed uncertainty). The latter increases … both uncertainty and disagreement (disagreed uncertainty). We use these implications to identify empirically the effects of …