useful for out-of-sample prediction. Nor do we find practical applications of Bernoulli functions in major risk …-based industries such as finance, insurance and gambling. We sketch an alternative approach to modeling risky choice that focuses on …

ambiguity model accommodates both ambiguity (uncertainty) and risk. For an incomplete, competitive asset market, we develop a … preferences to identify the ambiguity and risk indices as well as the ambiguity probability measure. We do not require ambiguity …

empirically study the relation between income risk, experimentally elicited loss aversion, and precautionary savings. We do so … subject to substantial income risk. In line with the theoretical predictions, we find that an increase in income risk is … aversion. An accompanying laboratory experiment confirms that an exogenous increase in income risk causally leads to this …

plans. We obtain explicit solutions in a stationary setting in which the financial market has different risk premia for …

We study the demand for actuarially fair Long Term Care (LTC hereafter) insurance in a setting where autonomous agents … themselves, while no agent wishes to buy complete insurance. We then show that the comparison of marginal utility of income (as … opposed to consumption) across health states depends on (i) whether agents do buy LTC insurance at equilibrium or not, (ii …

Assuming a risk-neutral bank and assuming household utility to be exponential, we show how under information symmetry …

. Should he exert more effort when he becomes more risk-averse? For instance, should we expect more risk-averse drivers to … presented in Jewitt (1989). We first extend the standard models of self-insurance and self-protection, and show that the …