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Axiom preferences and choice mistakes under risk
Herweg, Fabian; Hippel, Svenja; Müller, Daniel; … - 2024
We investigate whether violations of canonical axioms of choice under risk are mistakes or a manifestation of true preferences. First, we elicit axiom and gamble preferences and then allow subjects to revise their potentially conflicting preferences. Among the behavioral patterns that allow for...
Persistent link: https://www.econbiz.de/10014556632
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On the Effect of Uncertainty on Personal Vaccination Decisions
Courbage, Christophe; Peter, Richard - 2021
decision in the absence of ambiguity. We then show that uncertainty about the probability of side effects and the efficacy of … the vaccine always reduce take-up under ambiguity aversion. However, uncertainty about the underlying disease, being the … results are relevant for policy because reducing uncertainty associated with the vaccine always has the de-sired effect …
Persistent link: https://www.econbiz.de/10013231813
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Optimal consumption with intertemporal substitution under knightian uncertainty
Ferrari, Giorgio; Li, Hanwu; Riedel, Frank - 2020
We study an intertemporal consumption and portfolio choice problem under Knightian uncertainty in which agent …
Persistent link: https://www.econbiz.de/10012315509
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Default option, risk-aversion and household borrowing behaviour
Größl, Ingrid; Fritsche, Ulrich - 2007
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...
Persistent link: https://www.econbiz.de/10010426364
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Constant relative risk aversion and form equivalence classes
Battermann, Harald L.; Broll, Udo; Wahl, Jack E. - 1997
We derive a class of utility functions that are equivalent with respect to a well-defined functional form. We apply a general view of constant relative risk aversion to investigate on different equivalence relations. Then we compare our results with standard applications in economics and finance.
Persistent link: https://www.econbiz.de/10009675762
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Concavity, Stochastic Utility, and Risk Aversion
Jarrow, Robert - 2020
This paper studies the relation between concavity, stochastic or state dependent utility functions, and risk aversion. Using the common definition of risk aversion, but modified for state dependent preferences, we show that concavity does not imply risk aversion. Instead, it implies a weaker...
Persistent link: https://www.econbiz.de/10012844461
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Human Survival, Risk, and Law : Considering Risk Filters to Replace Cost-Benefit Analysis
Draper, John William - 2017
Selfish utilitarianism, neo-classical economics, the directive of short-term income maximization, and the decision tool of cost-benefit analysis fail to protect our species from the significant risks of too much consumption, pollution, or population. For a longer-term survival, humanity needs to...
Persistent link: https://www.econbiz.de/10012969820
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Risky Curves : From Unobservable Utility to Observable Opportunity Sets
Friedman, Daniel - 2017
Most theories of risky choice postulate that a decision maker maximizes the expectation of a Bernoulli (or utility or similar) function. We tour 60 years of empirical search and conclude that no such functions have yet been found that are useful for out-of-sample prediction. Nor do we find...
Persistent link: https://www.econbiz.de/10012975977
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Income Risk, Precautionary Saving, and Loss Aversion – An Empirical Test
Ibanez, Marcela; Schneider, Sebastian O. - 2021
uncertainty about future income triggers saving because of loss aversion. We extend their theoretical analysis to also consider …
Persistent link: https://www.econbiz.de/10013243502
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Risky curves : from unobservable utility to observable opportunity sets
Friedman, Daniel; Sunder, Shyam - 2011
. Petersburg Paradox ; decisions under uncertainty ; option theory …
Persistent link: https://www.econbiz.de/10009151813