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somewhat forward-looking. A calibrated two-asset life-cycle precautionary savings model can account for these features of …
Persistent link: https://www.econbiz.de/10011806271
Weather is a key source of income risk, particularly in emerging market economies. This paper uses a randomized controlled trial involving a sample of Indian farmers to study how an innovative rainfall insurance product affects production decisions. We find that insurance provision induces...
Persistent link: https://www.econbiz.de/10010406275
Madrassas (Islamic religious seminaries) have been alleged to be responsible for fostering Islamic extremism and violence, and for indoctrinating their students in narrow worldviews. However, we know very little about the behavior of Madrassa students, and how other groups in their communities...
Persistent link: https://www.econbiz.de/10009160745
Motivated by individuals' emotional response to risk at different time horizons, we model an 'anxious' agent - one who is more risk averse with respect to imminent risks than distant risks. Such preferences describe well-documented features of 1) individual behavior, 2) equilibrium prices, and...
Persistent link: https://www.econbiz.de/10009725585
We study general equilibrium asset prices in a multi-period endowment economy when agents' risk aversion is allowed to depend on the maturity of the risk. We find horizon-dependent riskaversion preferences generate a decreasing term structure of risk premia if and only if volatility is...
Persistent link: https://www.econbiz.de/10010439624
The recent nonexperimental literature on social learning focuses on showing that observational learning exists, that is, individuals do indeed draw inferences by observing the actions of others. We take this literature a step further by analyzing whether individuals are Bayesian social learners....
Persistent link: https://www.econbiz.de/10008657261
Studies regularly link levels of educational attainment to civic behavior and attitudes, but only a few investigate the role played by specific coursework. Using data collected from students who attended one of four public universities in our study, we investigate the relationship between...
Persistent link: https://www.econbiz.de/10008657282
Social interdependence is believed to play an important role in how people make individual choices. This paper presents a simple model constructed on the premise that people are motivated by their own payoff as well as by how their actions compare with those of other people in their reference...
Persistent link: https://www.econbiz.de/10003812571
We provide a preference-based rationale for endogenous overconfidence. Horizon-dependent risk aversion, combined with a possibility to forget, can generate overconfidence and excessive risk taking in equilibrium. An "anxiety prone" agent, who is more risk-averse to imminent than to distant...
Persistent link: https://www.econbiz.de/10010482950
Financial engineering offers the potential to significantly reduce the consumption fluctuations faced by individuals, households, and firms. Yet much of this potential remains unfulfilled. This paper studies the adoption of an innovative rainfall insurance product designed to compensate...
Persistent link: https://www.econbiz.de/10003864577