effect on any risk averse agent's decision variable. We then apply the two stochastic orders to some classic decision … of payoff functions, which nest most models in the literature as special cases, such that a risk change satisfies one of … problems in economics and finance including a portfolio problem, two insurance problems, and four management decision problems …

We study the effect of variation in correlation on investment decision in an experimental two asset application … attributed to common behavioral bias in financial decision. Field implications of the results are discussed …

Most textbook finance literature assumes risk to be the standard deviation of returns (volatility), which is not only … is consistent with investors’ actual perception of risk. Our method is presenting investors return distributions with … different risk characteristics for which they have to state their perceived risk and make investment decisions. Our results hint …

take risk as measured by the general risk question. We demonstrate that this disposition, which we call risk conception, is … strongly associated with optimism, a stable facet of personality, and that it predicts real-life risk taking. The general risk … question captures this disposition alongside pure risk preference. This likely contributes to the predictive power of the …

take risk as measured by the general risk question. We demonstrate that this disposition, which we call risk conception, is … strongly associated with optimism, a stable facet of personality and that it predicts real-life risk taking. The general risk … question captures this disposition alongside pure risk preference. This enlightens why the general risk question is a better …

a team decision algorithm, excess-risk vetoing, that combines simple majority voting with the right to veto alternatives …Many important economic and political decisions are made by teams. In the economic literature, however, the decision … extent observed team decisions under risk are actually consistent with the principles of rational choice, specifically the …

We consider a standard one-agent decision-making problem under risk and we address the following question: under what … conditions is utility maximization equivalent to 'risk' minimization, where the measure of risk used by the decision-maker is a … conservative coherent risk measure? …

explore this possibility, I develop a theory that unifies models of investment choice, informal risk sharing, and formal … financial contracts. I then test the predictions of this theory using a series of experiments with clients of a large … inefficiencies. First, borrowers free-ride on their partners, making risky investments without compensating partners for this risk …

Prospect Theory (PT) and Constant Relative Risk Aversion (CRRA) have clear-cut implications for the optimal asset … allocation between stocks and the risk-free asset as a function of the investment horizon. While CRRA preferences imply that the …