shocks to aggregate uncertainty, I introduce a small, time-varying risk of economic disaster in a standard real business … risk of disaster does not affect the path of macroeconomic aggregates - a "separation theorem" between macroeconomic … variation in risk premia over time, are observationally equivalent to preference shocks. An increase in the perceived …

I characterize a dynamic economy under general distributions of households' risk tolerance, endowments, and beliefs … consumption-share increases; (b) the wealth-share of high risk-tolerant households increases; (c) richer households' wealth … risk sharing. Higher uncertainty increases stock prices, risk premiums, volatility, wealth inequality and the dispersion of …

explain a set of behavioral anomalies identified across four distinct domains of decision-making: choice under risk, choice … risk and ambiguity, belief updating, and survey expectations. Our framework makes predictions that we test using exogenous …

We develop an integrated theory of investment, seasoned equity offerings (SEOs), liquidation, and corporate savings …

role of secondary markets in providing opportunities for redistributing risk is made transparent and the modifications …

In this paper, we assess the degree to which four of the most commonly used models of risky decision making can explain … enough to approximate Kahnenman and Tversky's prospect theory and that for certain parametric values will yield the expected … explain the decision-making behavior of the majority of our subjects. Surprisingly, we find that the choice behavior of the …

In line with the fallacy of riskification of uncertainty by which decision makers believe that the effects of … markets, such as natural disasters, terrorist attacks, and financial crises—as a problem of risk management. This is … institutional theory that points to stakeholder and institutional dynamics affecting economic incentives to invest in prevention and …

well calibrated. Finally we assess the role of risk, finding little evidence that risk-aversion drives a wedge between …