. We find that the sudden shock to the perceived liquidity risk leads managers to increase corporate cash holdings and to … express more concerns about hurricane risk in 10-Ks/10-Qs, even though the actual risk remains unchanged. Both effects are … temporary. Over time, the perceived risk decreases, and the bias disappears. The distortion between perceived and actual risk is …

We propose a task for eliciting attitudes towards risk that is close to real world risky decisions which typically … loss with probability 1 − p. We employ finite mixture models to uncover heterogeneity in risk preferences and find that (i … aversion. The procedure is sufficiently simple so that it can be easily used in field or lab experiments where risk elicitation …