Evidence of Illusion of Control - the fact that people believe to have control over pure chance events - is a recurrent finding in experimental psychology. Results in economics find instead little to no support. In this paper we test whether this dissonant result across disciplines is due to the...

We extend the discrete-choice rational inattention model to the case in which the decision maker can influence the payoff distribution across states. By reducing the gap between payoffs in different states, the decision maker is able to affect her own incentives to pay attention. The smaller the...

This paper presents evidence on the role of the endowment effect in shaping the risk-taking behavior of entrepreneurs, and how the potential of losing their firms lead them to take higher risks. This study uses an experimental design with 466 entrepreneurs in Cali, Colombia. Results show that...