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...

Experiments on intertemporal consumption typically show that people have difficulties in optimally solving such problems. Previous studies have focused on contexts in which agents are faced with risky future incomes and have to plan over long horizons. We present an experiment comparing decision...

A group of decision makers simultaneously make contributions towards a green fund that reduces the future probability of a climate catastrophe. We derive the theoretical predictions of the effects on contributions arising from 'behavioral parameters' such as loss aversion and present-bias;...

I study the emergence of coordination using a simple stag hunt game at both the individual and population levels. Consistent with the conjecture that coordination is difficult to attain in the n-player game, agents play risk dominant strategy when the number of matching partners increases....

Starting from Schelling (1960), several game theorists have conjectured that payoff equity might facilitate coordination in normal-form games with multiple equilibria - the more equitable equilibrium might be selected either because fairness makes it focal or because many individuals dislike...

Inspired by experimental evidence, we amend the recursive utility model to let risk aversion decrease with the temporal horizon. Our pseudo-recursive preferences remain tractable and retain appealing features of the long-run risk framework, notably its success at explaining asset pricing...

This study empirically tests volatility effects on land development options using data on the government's land sales by tender for the period from 1995 to 2018. We find that development land option premiums increase by 6% on average with one standard deviation increase in conditional...

This study examines the effect of smallholder farmers' access to a formal climate risk transfer mechanism on their risk preferences. Survey and experimental data were collected from smallholder farmers that have access to weather index-based crop insurance (WICI) in Ethiopia. We use an...

We give a full characterization of the continuation and stopping regions of optimal stopping of diffusions. We consider separately the case of a naive agent who is unaware of the possible time inconsistency in her behavior and the case of a sophisticated agent who is fully aware of such an...

This paper focuses on determining the factors influencing investors' risk-taking through empirical evidence from Vietnam. This study investigates risk perception, expected return and herding behavior, and other determinants such as historical volatility and subjective financial risk attitude;...