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Collective risk-taking decisions with heterogeneous beliefs

Gollier, Christian - 2003

Suppose that a group of agents having divergent expectations can share risks efficiently. We examine how this group should behave collectively to manage these risks. We show that the beliefs of the representative agent is in general a function of the group.s wealth level, or equivalently, that...

Persistent link: https://www.econbiz.de/10011507677

Risk-taking-neutral background risk

Franke, Günter; Schlesinger, Harris; Stapleton, Richard C. - 2013

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...

Persistent link: https://www.econbiz.de/10009690709

Diverse risk preferences and heterogeneous expectations in an asset pricing model

Gomez, Thomas; Piccillo, Giulia - 2019

We propose a heuristic switching model of an asset market where the agents' choice of heuristic is consistent with 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,...

Persistent link: https://www.econbiz.de/10012157926

Bank bonus pay as a risk sharing contract

Efing, Matthias; Hau, Harald; Kampkötter, Patrick; … - 2019

We argue that risk sharing motivates the bank-wide structure of bonus pay. In the presence of financial frictions that make external financing costly, the optimal contract between shareholders and employees involves some degree of risk sharing whereby bonus pay partially absorbs earnings shocks....

Persistent link: https://www.econbiz.de/10011966886

Can risk-taking preferences be modified? : some experimental evidence

Booth, Alison L.; Nolen, Patrick - 2014

We summarise our two sets of controlled experiments designed to see if single-sex classes within coeducational environments modify students' risk-taking attitudes. In Booth and Nolen (2012b), subjects are in years 10 and 11, while in Booth, Cardona-Sosa and Nolen (2014), they are first-year...

Persistent link: https://www.econbiz.de/10010344873

Loans, insurance and failures in the credit market for students

Del Rey, Elena; Verheyden, Bertrand - 2011

In the education literature, it is generally acknowledged that both credit and insurance for students are rationed. In order to provide a rationale for these observations, we present a model with perfectly competitive banks and risk averse students who have private information on their ability...

Persistent link: https://www.econbiz.de/10009012186

Macro-financial linkages in the high-frequency domain : the effects of uncertainty on realized volatility

Caporale, Guglielmo Maria; Karanasos, Menelaos; Yfanti, … - 2019

This paper estimates a bivariate HEAVY system including daily and intra-daily volatility equations and its macro-augmented asymmetric power extension. It focuses on economic factors that exacerbate stock market volatility and represent major threats to financial stability. In particular, it...

Persistent link: https://www.econbiz.de/10012158736

How does competition affect reputation concerns? : theory and evidence from Airbnb

Rossi, Michelangelo - 2019

I show how changes in competition affect the power of reputation to induce sellers to exert effort. The impact of …. To guide the empirical analysis, I develop a model of reputation where the relative number of hosts and guests affects … the value of building a reputation through effort. In this framework, more competition depresses hosts' profits and leads …

Persistent link: https://www.econbiz.de/10012138911

Counter intuitive learning : an exploratory study

Hanaki, Nobuyuki; Kirman, Alan P.; Pezanis-Christou, Paul - 2016

The literature on learning in unknown environments emphasises reinforcing on actions which produce positive results. But, in some cases, success requires shifting from a currently successful actions to others. We examine, experimentally and theoretically in a very simple framework, how...

Persistent link: https://www.econbiz.de/10011517970

Time will tell : recovering preferences when choices are noisy

Alós-Ferrer, Carlos; Fehr, Ernst; Netzer, Nick - 2018 - This version: October 2018

The ability to uncover preferences from choices is fundamental for both positive economics and welfare analysis. Overwhelming evidence shows that choice is stochastic, which has given rise to random utility models as the dominant paradigm in applied microeconomics. However, as is well known, it...

Persistent link: https://www.econbiz.de/10011929616

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