. The data includes manager characteristics, such as risk aversion and talent; firm characteristics, such as ownership … can be tested with our data. Our contribution is twofold. We disentangle the role of risk-aversion and talent in … determining how firms select and motivate managers. In particular, risk-averse managers are matched with firms that offer low …

. Moreover, pre-crisis incentive pay appears too strong for an optimal trade-off between trading income and risk which maximizes …

aggregate risk. We propose a theory to explain these risk exposures. We study a financial accelerator model where entrepreneurs … inefficiently high risk exposure for entrepreneurs …

In this paper we: (i) provide a model of the endogenous risk intolerance and severe aggregate demand contractions … addressing these contractions. The key mechanism stems from heterogeneous risk tolerance: as a recessionary shock hits the … economy and brings down asset prices, risk-tolerant agents' wealth share declines and their leverage rises endogenously. This …

that consumption commitments can cause risk-neutral consumers to care about risk, creating incentives to both insure risks … and bunch uninsured risks together. For example, workers may prefer to avoid wage risk while bearing an unemployment risk …

Investor confidence and risk tolerance are important concepts that investors are constantly trying to gauge. Yet these … changes in demand and fundamentals perceived by all investors, and a second that reflects changes in the relative risk … tolerance of institutional investors over and above that of domestics. The latter component, changes in relative risk tolerance …

corporate risk-taking decisions. Higher taxes reduce expected profits more for risky projects than for safe ones, as the … government shares in a firm's upside but not in its downside. Consistent with this prediction, we find that risk taking is … sensitive to taxes, albeit asymmetrically: the average firm reduces risk in response to a tax increase (primarily by changing …

Heterogeneously risk-averse individuals who lack access to formal insurance build and use relationships with each other … to manage risk. I study the formation of these relationships. I show that the composition of equilibrium groups under … reduction in aggregate risk may lead to an increase in risk borne by the most risk-averse individuals, as the least risk …

We analyze the returns to education in a life-cycle framework that incorporates risk preferences, earnings volatility …