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Sahm, Marco - 2017

I examine the impact of risk preferences on efforts and winning probabilities in generalised Tullock contests between two players. The theoretical analysis yields two main results. First, I specify a sufficient condition on the agents' comparative prudence under which a higher common level of...

Persistent link: https://www.econbiz.de/10012956876

International Environmental Agreements with Uncertainty, Learning and Risk Aversion

Finus, Michael - 2014

This paper analyses the formation of international environmental agreements (IEAs) under uncertainty, focusing on the role of learning and risk aversion. It bridges two strands of literature: one focused on the role learning for the success of IEA formation when countries are risk neutral and...

Persistent link: https://www.econbiz.de/10013059058

Rank Dependent Utility, Tax Evasion and Labor Supply

Eide, Erling - 2010

payers act according to some non-expected utility theory, and (2) Individual ethical norms and social stigma induce people … subjective probabilities of being penalised according to the rank dependent utility theory, and (2) Tax payers' beliefs about … utility theory. The model explains data 53% better than pure random choices and predicts hours worked in the regular economy …

Persistent link: https://www.econbiz.de/10013136684

When is Ambiguity-Attitude Constant?

Eichberger, Jürgen; Grant, Simon; Kelsey, David - 2021

This paper studies how updating affects ambiguity-attitude. In particular we focus on the generalized Bayesian update of the Jaffray-Phillipe sub-class of Choquet Expected Utility preferences. We find conditions for ambiguity-attitude to be the same before and after updating. A necessary and...

Persistent link: https://www.econbiz.de/10013315928

Limited Liability, Asymmetric Taxation, and Risk Taking - Why Partial Tax Neutralities Can Be Harmful

Ewert, Ralf - 2011

We examine the combined effects of asymmetric taxation and limited liability on optimal risk taking of investors. Given an optimal risk level in the pre-tax case under full liability, loss-offset restrictions reduce, and limited liability enhances the incentives for taking risk. For every degree...

Persistent link: https://www.econbiz.de/10013131353

The Standard Deviation of Life-Length, Retirement Incentives, and Optimal Pension Design

Aronsson, Thomas - 2010

In this paper, we consider how the retirement age as well as a tax financed pension system ought to respond to a change in the standard deviation of the length of life. In a first best framework, where a benevolent government exercises perfect control over the individuals' labor supply and...

Persistent link: https://www.econbiz.de/10013137106

Once Upon a Time Preference - How Rationality and Risk Aversion Change the Rationale for Discounting

Traeger, Christian P. - 2012

The paper develops an axiomatic framework for rational decision making. The von Neumann-Morgenstern axioms give rise to a richer risk attitude than that captured in the standard discounted expected utility model. I derive three models that permit a more comprehensive risk evaluation. These...

Persistent link: https://www.econbiz.de/10013107349

Diversification, Risk Aversion and Expectation in a Holdout Scenario

Eggert, Wolfgang - 2015

We argue a holdout is not a destructive investor behaviour but a rational investment decision. This investment decision is characterised by the mean-variance approach. We investigate intercreditor conflict by diverse portfolio structure. We demonstrate that at some point during the Greek (2012)...

Persistent link: https://www.econbiz.de/10013013489

The Impact of Entrepreneurial Risk Aversion on Wages in General Equilibrium

Feng, Ying - 2015

One of the leading theories of entrepreneurship is that less risk averse individuals become entrepreneurs and more risk averse individuals become their employees. Kihlstrom and Laffont (1979) formalized this insight in an elegant and widely taught general equilibrium model. However, their model...

Persistent link: https://www.econbiz.de/10013021717

Estimating Individual Ambiguity Aversion : A Simple Approach

Gneezy, Uri; Imas, Alex; List, John A. - 2021

We introduce a simple, easy to implement instrument for jointly eliciting risk and ambiguity attitudes. Using this instrument, we structurally estimate a two-parameter model of preferences. Our findings indicate that ambiguity aversion is significantly overstated when risk neutrality is assumed....

Persistent link: https://www.econbiz.de/10013315553

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