The prospect theory is one of the most popular decision-making theories. It is based on the S-shaped utility function …, unlike the von Neumann and Morgenstern (NM) theory, which is based on the concave utility function. The S-shape brings in … mathematical challenges: simple extensions and generalizations of NM theory into the prospect theory cannot be frequently achieved …

uncertainty. The firm faces additional sources of uncertainty that are aggregated into a background risk. We show that the firm … always chooses its optimal debt-equity ratio to minimize the weighted average cost of capital, irrespective of the risk …. When the background risk is either additive or multiplicative, we provide reasonable restrictions on the firm's preferences …

The paper studies an duopoly with risk averse firms exposed to demand uncertainty. A risk sharing market is introduced …

impact of economic risk and risk preferences upon regional allocation of investments. The source of risk stems from the … upon the firms' risk preferences. As a result regional agglomeration of investments may occur although the objective of the … elasticity of risk aversion. Elements of risk preferences beyond risk aversion prove to be very important to evaluate regional …

, price level and futures price and hence real wealth is stochastic. For a risk averse investor, optimal consumption and …

differential income taxation. We start with the well-known result that risk-taking may increase when income tax rates increase and … speculative hedging is. Analysing tax-sensitivity of the corporate hedge shows that a higher risk in the first place may reduce …

– game theory is a useful set of tools for better understanding different risk settings. Embedded in a short history of the …Basel II changes risk management in banks strongly. Internal rating procedures would lead one to expect that banks are … changing over to active risk control. But, if risk management is no longer a simple "game against nature", if all agents …