Flexible repayment schedules allow borrowers to invest in profitable yet risky projects, but practitioners fear they erode repayment morale. We study repayment choices in rigid and flexible loan contracts that allow discretion in repayment timing. To separate strategic repayment choices from...

Loss aversion, risk aversion, and the probability weighting function (PWF) are three central concepts in explaining decisionmaking under risk. I examine interlinkages between these concepts in a model of decisionmaking that allows for loss averse/tolerant stochastic reference dependence and...

Estimating the impact of risk aversion on emigration at the individual level is complicated by selection issues. In this paper, we use original data from Albania on mobility intentions and elicited risk aversion to provide causal estimates on this relationship. Our identification strategy relies...

We consider income-source-dependent tax evasion and show that this is a generalization of the well-known endowment effect. We show that loss aversion, moral costs, mental accounting, and risk preferences play a key role in explaining key features of source-dependent tax evasion. We provide...

We apply the basic lessons and insights learned in the elicitation and estimation of risk and time preferences literature to the literature on social preferences. Following Andersen et al. (2008), we design a laboratory experiment to jointly elicit risk preferences and preferences for altruism....

A formula is derived for the social cost of carbon (SCC) that takes account of intragenerational income inequality and its evolution with economic growth. The social discount rate (SDR) should be adjusted to account for intragenerational and intergenerational inequality aversion and for risk...