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Asset integration, risk taking and loss aversion in the laboratory
Morrison, William G.; Oxoby, Robert J. - 2019
We report on a laboratory experiment testing for the presence of loss aversion, as separate from risk aversion …, utilizing an asset integration protocol designed to ensure that a loss of cash provided by the experimenter is viewed as a real … loss by experimental participants. Our experimental design augments the Holt-Laury risk preference elicitation methodology …
Persistent link: https://www.econbiz.de/10011997618
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Portfolio allocation, income uncertainty and households' flight from risk
Brown, Sarah; Gray, Daniel; Harris, Mark N.; Spencer, … - 2016
Analysing the US Panel Study of Income Dynamics, we present a new empirical method to investigate the extent to which households reduce their financial risk exposure when confronted with background risk. Our novel modelling approach - termed a deflated fractional ordered probit model -...
Persistent link: https://www.econbiz.de/10011594575
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Willingness to take risk : the role of risk conception and optimism
Dohmen, Thomas; Quercia, Simone; Willrodt, Jana - 2018
We show that the disposition to focus on favorable or unfavorable outcomes of risky situations affects willingness to take risk as measured by the general risk question. We demonstrate that this disposition, which we call risk conception, is strongly associated with optimism, a stable facet of...
Persistent link: https://www.econbiz.de/10011880595
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How do humans respond to huge financial losses?
Mujcic, Redzo; Powdthavee, Nattavudh - 2022
personal traits. The findings support a prospect theory-based model with a coefficient of loss aversion that is increasing in … examine how human beings respond to major financial losses. University ethics boards would not allow this kind of huge-loss …. Participants lose any cash placed on a wrong answer. We find evidence of risk reduction after people suffer a loss in the previous …
Persistent link: https://www.econbiz.de/10013367589
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Do losses trigger deliberative reasoning?
Carpenter, Jeffrey P.; Munro, David - 2022
There is a large literature evaluating the dual process model of cognition, including the biases and heuristic it implies. To advance this literature, we focus on what triggers decision makers to switch from the intuitive process (aka System 1) to the more deliberative process (aka System 2)....
Persistent link: https://www.econbiz.de/10013198848
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Do employee share owners face too much financial risk?
Kruse, Douglas L.; Blasi, Joseph R.; Weltmann, Dan; … - 2019
excessive financial risk. Recent theory concludes that 10-15% of a worker's wealth portfolio can be prudently invested in …
Persistent link: https://www.econbiz.de/10012002671
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Banking on snow : bank capital, risk, and employment
Baumgartner, Simon; Stomper, Alex; Schober, Thomas; … - 2022
How does small-firm employment respond to exogenous labor productivity risk? We find that this depends on the capitalization of firms' local banks. The evidence comes from firms offering (quasi-) fixed employment to workers whose productivity depends on the weather. Weather risk reduces this...
Persistent link: https://www.econbiz.de/10013358738
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Equality of opportunity for well-being
Mahler, Daniel Gerszon; Ramos Morilla, Xavier - 2017
A growing literature has tried to measure the extent to which individuals have equal opportunities to acquire income. At the same time, policy makers have doubled down on efforts to go beyond income when measuring well- being. We attempt to bridge these two areas by measuring the extent to which...
Persistent link: https://www.econbiz.de/10011716166
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Is inequality of opportunity robust to the measurement approach?
Ramos Morilla, Xavier; Van de Gaer, Dirk - 2017
Recent literature has suggested many ways of measuring equality of opportunity. We analyze in a systematic manner the various approaches put forth in the literature to show whether and to what extent different choices matter empirically. We use EU-SILC data for most European countries for 2005...
Persistent link: https://www.econbiz.de/10011763830
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Dealer pricing of consumer credit
Bertola, Giuseppe; Hochgürtel, Stefan; Koeniger, Winfried - 2002
Interest rates on consumer lending are lower when funds are tied to purchase of a durable good than when they are made available on an unconditional basis. Further, dealers often choose to bear the financial cost of their customers' credit purchases. This paper interprets this phenomenon in...
Persistent link: https://www.econbiz.de/10011406655