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The only thing certain in economic life is that most of it is conducted into an uncertain environment; that raises a question though: what makes individuals pursue entrepreneurship which engages too much risk for an unsure, or too little, return? Research has shown that people tend to be...
Persistent link: https://www.econbiz.de/10009788548
Persistent link: https://www.econbiz.de/10012009722
Contracts with embedded prepayment/extension options are subject to behavioral risk, due to the unpredictable exercise strategy followed by the option holder. Empirical data show that, in many situations and for different reasons, investors do not act purely on the strength of financial...
Persistent link: https://www.econbiz.de/10013044257
When giving to one charity, individuals face two types of uncertainty, descriptive and normative. We report a between-subjects charitable-giving experiment which provides first data on normative uncertainty (n=1890). In our experiment, participants can bid for either descriptive information,...
Persistent link: https://www.econbiz.de/10014358479
This research verifies the existence of the aversion to uncertainty bias in individual financial decisions. It also evaluates the effects of gender and knowledge in this bias. We considered a sample of 80 undergraduate management students from Universidade Católica de Brasília. The results...
Persistent link: https://www.econbiz.de/10014138921
This paper shows that individual beliefs on the effectiveness of formal and informal sources of risk sharing determine financial precautionary behavior. We present empirical evidence demonstrating that higher trust in public insurance systems reduces net liquid wealth while higher trust in...
Persistent link: https://www.econbiz.de/10012825354
In the context of income dynamics, we investigate whether aspects of agents' superior information relative to the econometrician's limited information are captured in subjective expectations data. It is natural, for instance, to assume that the econometrician cannot observe idiosyncratic shocks...
Persistent link: https://www.econbiz.de/10003274238
We provide a critique of the methods that have been used to derive measures of income risk and draw attention to the importance of demographic factors as a source of income risk. We also propose new measures of the contribution to total income risk of demographic and labour market factors....
Persistent link: https://www.econbiz.de/10011433584
We use cross-country microdata to analyse the risk taking of households in Europe and the US. Concerning the extensive as well as the intensive margin of risky assets, European households differ substantially from US households; but also inside Europe we document substantial differences....
Persistent link: https://www.econbiz.de/10011997521
We use cross-country microdata to analyse the risk taking of households in Europe and the US. Concerning the extensive as well as the intensive margin of risky assets, European households differ substantially from US households; but also inside Europe we document substantial differences....
Persistent link: https://www.econbiz.de/10012871885