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 … that in a situation in which a household without default option would neither borrow nor save, the existence of a default …

In fifteen European countries, China, and the US, stocks and business equity as a share of total household assets are … labor-income risk can explain much of this risk-taking pattern. Uncontrollable labor-income risk stresses middle …, middle-income households reduce (controllable) financial risk. Richer households, having less pressure, can afford more risk …

category. Background risk exerts a significant impact on household portfolios, resulting in a 'flight from risk', away from … households reduce their financial risk exposure when confronted with background risk. Our novel modelling approach - termed a … risk, and is unique in recovering for, any given risky asset class, the shares that are reallocated to a safer asset …

This paper examines households' self-insurance in financial markets when a rare personal disaster, such as disability … or long-term unemployment, may occur during working years. Personal disaster risk alters lifetime ex-ante investment … characterizes rare disasters, results in lower risk-taking at the beginning of working life, and is crucial in order to match 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 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 …

reduction (self-protection) so that correlation becomes endogenous. If prevention concerns only one risk, introducing a second … exogenous risk increases the level of prevention expenditures, even if correlation is negative. If prevention expenditures may … increased dependence increases aggregate prevention expenditures, but not necessarily prevention expenditures for each risk due …

degree of pessimism of the representative agent is the mean of the individual ones weighted by their index of absolute risk …