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 … category. Background risk exerts a significant impact on household portfolios, resulting in a 'flight from risk', away from …

and costs of precaution are ex-ante uncertain, and this places a risk burden on both injurers and victims. The optimal … policy should, at the same time, strike a balance between benefits and costs of the measures, and attenuate the ex-ante risk … (positive or negative) and their disposition towards risk. With corrective taxes, it also depends on the elasticity of …