This paper studies how auditors' risk aversion shapes the audit market and how it interacts with legal liability. The … main pillar of the analysis is that the relation between risk aversion and the supplied audit quality is generally non … sufficiently risk-averse auditors in the absence of any strategic interaction. Linking auditors' supply of audit services with …

previous studies that found a negative relation between cognitive ability and risk aversion into perspective and in particular … show that cognitive ability is related to noisy behavior rather than risk preferences. We also find age and education to be … and more robustly correlated to risk preferences …

In this paper we present a dynamic discrete-time model that allows to investigate the impact of risk-aversion in an …-time limit of our model with no uncertainty and no risk-aversion. Focusing on the continuous-time limit of the infinite horizon … inversely related to the degrees of uncertainty and risk-aversion. However, the effect of uncertainty and risk …

We report evidence of an endowment effect for risk, extending previous results to the popular paired-choice lottery … setting. Specifically, we observe a distribution of revealed preferences consistent with risk aversion that diminishes in …

uninsured capital income risk, and suffer from an information-processing capacity constraint. For given attention devoted to … capital income risk, we solve for the optimal consumption-saving choices and show that the expected welfare is increasing with … capacity, assuming a relative risk aversion degree larger than unity. Furthermore, we solve for attention choice and find that …

How does risk aversion change in wealth? To answer this question, we implemented a field experiment in the form of a … evidence for decreasing absolute risk aversion (DARA) and decreasing relative risk aversion (DRRA). We also find evidence of an …

probability and study when the desire to randomize reveals information about risk attitude. Finally, we highlight how incentives …

the internal margin, i.e., the strength, of loss aversion, and empirically study the relation between income risk …-income population of Bogotá, characterized by limited financial education and subject to substantial income risk. In line with the … theoretical predictions, we find that an increase in income risk is associated with higher savings for loss-averse individuals …

catastrophic risks. Economists typically model decision making under risk and uncertainty by expected utility with constant … relative risk aversion (power utility); statisticians typically model economic catastrophes by probability distributions with …

We examine the optimal saving decision of individuals who face a multiplicative risk. An individual is defined to be … multiplicative risk prudent if multiplying a pure risk to her future wealth raises her optimal savings. We show that convex marginal … utility is not sufficient to induce multiplicative risk prudent. Instead, an individual is multiplicative risk prudent if and …