Assuming a risk-neutral bank and assuming household utility to be exponential, we show how under information symmetry the covariance of income and loan repayments may explain higher household borrowings than in the case without default option. Under ex post information asymmetry and positive...

This paper shows that securities with a non-linear payoff design can foster household risk-taking. We demonstrate this effect empirically by exploiting the introduction of capital guarantee products in Sweden from 2002 to 2007. The fast and broad adoption of these products is associated with an...

With a novel experimental design we investigate whether risk perception, return expectations, and investment propensity are influenced by the scale of the vertical axis in charts. We explore this for two presentation formats, namely return charts and price charts, where we depict low- and...

• This paper reviews both published and emerging research on different risks retirees face and possible solutions financial planners can use to help clients overcome behavioral hurdles.• Risk assessment questions that measure loss aversion, as well as reducing myopic behavior, can help keep...

An insurance contract may be nonperforming—resulting in a situation in which the insured might be worse off than without insurance since also losing the premium. This study revisits how contract nonperformance risk influences individuals’ willingness to pay (WTP) for insurance contracts. In...

This paper examines whether economic policy uncertainty (EPU) reduces the level of financial inclusion. I predict that high EPU should have a negative effect on the level of financial inclusion. I argue that high EPU will discourage financial institutions from providing basic financial services...

This paper analyses vulnerability in Fiji, the Kyrgyz republic, Papua New Guinea and Vanuatu. In incorporating measures of vulnerability there is no major departure from the perspective of MDG1 Analyses of vulnerability, like that in the present paper, emphasize the fact that the debates around...

Compensating wage differentials are used to estimate individuals' marginal rates of substitution between income and both fatal and non-fatal occupational-accident risks in the Mexico City Metropolitan Area. Data are obtained by in-person survey of almost 600 workers and include workers'...

We analyze a model in which firms are able to acquire information about product risks and may or may not be required to disclose this information. We initially study the effect of disclosure rules assuming that firms are not liable for the harm caused by their products. Although mandatory...

Crises is an unprecedented threat to the tourism industry that affects tourists travel decision and causes a substantial drop in tourism demand. This study attempt to examine impacts of COVID-19 outbreak crises on tourists’ travel behaviour. The empirical results of the current study indicate...