time take-up insurance for moderate risks at highly loaded premiums. This paper explores whether prospect theory, in … theory to insurance problems is the choice of the reference point. We motivate and explore two possible reference points …, state-dependent initial wealth and final wealth after buying full insurance. It turns out that particularly the latter …

This paper analyzes insurance demand under prospect theory in a simple model with two states of the world and fair … insurance contracts. We argue that two different reference points are reasonable in this framework, state-dependent initial … wealth or final wealth after buying full insurance. Applying the value function of Tversky and Kahneman (1992), we find that …

risk taking, yet results remain inconclusive. We suspect that this is due to difficulty in capturing risk preferences with … expected utility based tasks. Prospect theory, on the other hand, suggests that risk preferences differ between gains, losses … financial risk taking and 2D:4D, a putative marker of prenatal testosterone exposure, in the framework of prospect theory. We …

Standard economic theory assumes that individual risk taking decisions are independent from the social context. Recent … experimental evidence however shows that the income of peers has a systematic impact on observed degrees of risk aversion. In … their peers. The present paper is, to the best of our knowledge, the first systematic analysis of income inequality and risk …

Standard economic theory assumes that individual risk taking decisions are independent from the social context. Recent … experimental evidence however shows that the income of peers has a systematic impact on observed degrees of risk aversion. In … their peers. The present paper is, to the best of our knowledge, the first systematic analysis of income inequality and risk …

the expected value of a lottery to the latter, so they are weakly risk averse. Besides explaining behavioral … irregularities like the expected utility paradoxes of Allais and Rabin, CT also separates risk attitude in the strong sense from … attitude towards wealth. Risk attitude is completely determined by the curvature of vuand is independent of the value function …