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 … and the pure time discount rate, there is distributional neutrality between the two periods. Otherwise, changes of risk …

We investigate how individual risk preferences affect the likelihood of selecting the more able contestant within a two …-player Tullock contest. Our theoretical model yields two main predictions: First, an increase in the risk aversion of a player … less able but less risk averse contestant can achieve an equal or even higher probability of winning than a more able but …

empirically show two main findings: first, risk-taking is positively related to the length of tax loss periods because the loss … rules shift some risk to the government; and second, the tax rate has a positive effect on risk-taking for firms that expect …

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 …

investor to hold out. This model shows that the investment decision is based on the portfolio structure, risk aversion and …

Common integrated assessment models produce the counterintuitive result that higher risk aversion does not lead to …. The simulations show that aversion to this tipping point risk has little effect. For climate sensitivity of realistic …

How does risk affect saving? Empirical work typically examines the effects of detectible differences in risk within the … data. How these differences affect saving in theoretical models depends on the metric one uses for risk. For labor …-income risk, second-degree increases in risk require prudence to induce increased saving demand. However, prudence is not …

Netherlands are much more risk averse than U.S. households …

likely to differ in their tolerance for risk. In this paper, I investigate a contracting scheme designed to mitigate the … asymmetric information problem where agents are heterogeneous in their tolerance for risk. Mechanisms that recognize the …' private information about risk tolerance, offer a sensible way to approach the problem. These contracts are generally a …