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Persistent link: https://www.econbiz.de/10011525292
This paper investigates how loss-aversion affects individuals' decisions on savings and insurance purchase. Specifically, this paper empirically tests if prospect theory's loss aversion decreases insurance demand and increases savings demand. Prospect theory predicts that boundedly rational...
Persistent link: https://www.econbiz.de/10012962197
An individual’s decision about how much to save depends on her perception of how current savings affects future well-being. Fatalistic individuals believe that they have little or no control over future outcomes. We develop a theoretical model linking fatalism to savings and test the...
Persistent link: https://www.econbiz.de/10010577431
Analysis of an original, broad, internet-based survey reveals that debt holding is related to three aspects of time discounting: present bias, measured by the degree of declining impatience in the generalized hyperbolic discount function; borrowing aversion, captured by a sign effect -...
Persistent link: https://www.econbiz.de/10013119691
Analysis of an original, broad, internet-based survey reveals that debt holding is related to three aspects of time discounting: (i) present bias, measured by the degree of declining impatience in the generalized hyperbolic discount function; (ii) borrowing aversion, captured by a sign effect -...
Persistent link: https://www.econbiz.de/10009314489
Time preferences can affect divorce probability both affecting the quality of the match and affecting the spouses' reactions to negative shocks. We analyze the relationship between time preferences and divorce decisions using data from the Italian Survey on Household Income and Wealth, which...
Persistent link: https://www.econbiz.de/10010222260
People’s value for their own time is a key input in evaluating public policies: evaluations should account for time taken away from work or leisure as a result of policy. Using rich choice data collected from farming households in western Kenya, we show that households exhibit non-transitive...
Persistent link: https://www.econbiz.de/10012815796
The new Medicare Part D program provides prescription drug coverage for older Americans through highly subsidized and tightly regulated plans offered by private insurance firms. For most eligible individuals without coverage from other sources, obtaining Part D coverage would be rational, but it...
Persistent link: https://www.econbiz.de/10010427649
Decisions are often postponed even when future profits are not expected to compensate for the losses. This is especially relevant for financial and entrepreneurial disinvestment choices, as investors often have a disposition to hold on to losing assets for too long. We use an experiment with...
Persistent link: https://www.econbiz.de/10012502922
Recent models of the evolution of preferences have provided profound new insights into the origins of risk attitudes. In most of these models the evolutionary “objective function” is the maximization of the expected number of offspring, or alternatively, the maximization of the...
Persistent link: https://www.econbiz.de/10011193963