We present first evidence how individual risk preferences shape entrepreneurial investment among the very wealthy using … standard measure of risk tolerance. We find that wealthy individuals are more likely to be entrepreneurs and invest a larger … ways strongly determined by individual risk tolerance. Since the wealthy dominate aggregate risky investment, their risk …

One of the leading theories of entrepreneurship is that less risk averse individuals become entrepreneurs and more risk … comparative static result, that an economy-wide increase in risk aversion lowers the equilibrium wage, appeared to require the … assumption that all agents had identical risk aversion index, throwing out their motivating insight and indicating that the model …

The relationship between risk in the environment, risk aversion and inequality aversion is not well understood … with varying degrees of risk (“endowment risk”) influence individual behavior. We derive theoretical predictions for these … games using utility functions that capture additively separable constant relative risk aversion and inequity aversion. We …