Drees, Burkhard; Eckwert, Bernhard; Várdy, Felix - In: European Economic Review 62 (2013) C, pp. 114-129
We explore the effect of interest rates on risk taking and find that it depends on the type of risk involved. In a Bayesian setting, investments can be risky either because payoff-relevant signals are noisy or because the dispersion of the prior is high. While both types of risk contribute...
